Inflation fell in September to 0.30% after energy prices fell. And government procedures

Inflation fell in September to 0.30%

After falling prices of energy products And the results of the measures taken by the government to help with living expenses.

  • Headline inflation September 2023

Actual: 0.30% Previous: 0.88%

KTBGM: 0.86% Consensus: 0.70%

  • The Ministry of Commerce reported that headline inflation in September fell to 0.30% Under the weight of falling prices of energy products. And the results of government measures to help cover the costs of living, at a time when the prices of fresh meat and vegetables decreased. Pressure on the prices of food products
  • For the fourth quarter The Ministry of Commerce sees this Inflation trendSlowerAfter the continuous decline in meat prices, the results of measures to help with living expenses, the impact resulting from the tightening monetary policy and the rise in the price base in previous years, while the impact of the El Nino phenomenon and the depreciation of the baht, and the economic recovery may be sufficient to help support the prices of goods and services. Ministry of CommerceDowngrading expectationsGeneral inflation rate this year To the frame 1.0%-1.7% (Mediator 1.35%) From the original frame 1.0%-2.0%
  • We maintain the same opinion that Monetary Policy Committee (Monetary Policy Committee.) He may choose to keep the interest rate policy at the level 2.50% In any case, the inflation rate is unlikely to differ from the Bank of Thailand’s latest forecast. However, the assessment of the inflation trend remains uncertain. Especially the impact of the digital wallet scale and the trend of crude oil prices, which may stabilize in the region of $80-100 per barrel.
  • As long as the average inflation rate is no more than +0.25% on a monthly basis, the MPC may not be too concerned about inflation expectations and an interest rate of 2.50% remains appropriate. Therefore, we see that Thai bond yields have increased recently It should shrink a little. To reflect the opportunity to maintain the MPC interest rate policy, which will increase.

The Ministry of Commerce reported that general inflation was at level 0.30% dropped from the level 0.88% in August

  • The Ministry of Commerce announces the Consumer Price Index (consumer price index) last month decrease -0.36% From the previous month (we are looking +0.20%) This came after the prices of other categories decreased, and the prices of non-food and beverages reached -0.5%, led by the housing category -1.3%, as a result of measures to reduce electricity costs. At the same time, fuel prices decreased by -0.1%. In addition, prices in the food and non-alcoholic beverages category reflected and decreased by -0.16% after prices for meat, fresh vegetables and ready-to-eat foods continued to decline. the prices.
  • Compared to the same period last year General inflation slowed to 0.30% from 0.88% In the previous month The supporting factor is still the price of fuel. Public fares while electricity supply decreased according to government measures to help with living expenses. Prices in the food category reversed the decline for the first time in 23 months following the continued decline in meat prices. The prices of fresh vegetables have decreased. This was in line with increased production, while the prices of rice, eggs and dairy products continued to rise compared to the previous year. When deducting the price of fresh food and energy, core inflation (core CPI) slowed for the ninth straight month to 0.63% from 0.79% in the previous month.

We maintain the same perspective. Which Monetary Policy Committee. The cycle of interest rate increases ended at this level. 2.50% After the inflation rate tended to match the government’s expectations. Monetary Policy Committee. Latest

  • The recent slowdown in headline inflation though has been the opposite of what we expected. But it could be taken as a signal that might make the MPC less concerned about future inflation trends. And from our latest evaluation, we found that If the inflation momentum does not exceed the level +0.25% sh/m will make The inflation trend does not differ from the government’s expectations. Monetary Policy Committee. This makes the Monetary Policy Committee’s recent view that the interest rate at 2.50% is an appropriate level. Under the latest economic assumptions, however, this has not changed. We consider it Important variables that may cause Our assessment of inflation expectations and Monetary Policy Committee. That could change He is 1. Crude oil price trend And 2. Impact of measures Digital wallet As for the price of crude oil, we believe that the price of crude oil may fluctuate in the range of $80-100 per barrel. It may not rise above $120 or $150 per barrel. This is because the OPEC+ group may not be able to reduce production for a long time or reduce production further. Especially at a time when the United States “began to invest more in the energy business and began to compete for market share. At the same time, OPEC+ still had to rely heavily on energy revenues. In addition, if the two major economies , both the United States and Europe, are clearly slowing down as we have assessed. It will make it difficult for oil prices to rise. As for the issue of the digital wallet, although there are no clear details about it yet. But we have assessed that initially and it may not help as These measures greatly accelerate the pace of inflation, considering that the financial multiplier for measuring the distribution of funds is only 0.4 times higher, and if the funds are distributed through the blockchain, there may be a financial multiplier that is lower than that.
  • The market may start thinking so Monetary Policy Committee. The cycle of interest rate increases is over. As a result, Thai bond yields have risen in the recent period.I started to shrink a little.We may think so and short-term bond yields, such as the Thai two-year bond yield, may fluctuate near the 2.50% to 2.60% level if the MPC’s assumption of a final interest rate of 2.50% is correct. In the next ten years, we may “see things differently.” “From most market players and analysts. Because the original assumption was the US economic trend has clearly slowed, allowing the US 10-year bond yield to fall (and possibly drop to 4.00% by the end of the year), and it is beneficial for the 10-year bond yield to fall.” years in Thailand easily to about 3.10% to 3.20% by the end of this year. We accept that. Factors of concern He is Impact of measures Digital wallet In terms of finding funding sources for such procedures (including other government stimulus measures), which could lead to longer-term bond yields being higher than we expect.

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