Despite headline inflation hitting a 14-year high in August, the Bank of Thailand’s Economic and Monetary Conditions report, which was released on Friday, said that the outlook for the Thai economy continued to improve, with help from private consumption and the tourism industry.
The central bank noted that private consumption indicators stayed relatively stable from the previous month, while private investment indicators rose in tandem with manufacturing output.
Meanwhile, foreign tourists continued to increase, as did public spending, which improved due to higher current and capital expenditure. However, exports of goods fell as a result of weakening demand from overseas and temporary supply-side factors.
Thailand’s Consumer Price Index (CPI) rose 7.86% in August, within the expectation range of 7.7-7.9%. Inflation in August rose from 7.61% in the previous month. The average CPI for the first eight months of this year grew 6.14%.
Spending on almost all categories of consumer goods, with the exception of non-durables, increased from the previous month, contributing to a stable level of private consumption indicators after seasonal adjustment. Several underlying factors that bolster household consumption saw gradual improvements, particularly employment and consumer confidence. However, rising living costs continued to weigh on consumption.
