BANGKOK (BLOOMBERG) - Thailand's government warned that consumer prices may not turn positive as early as expected this year after slumping crude oil costs pushed down the country's inflation index for a 12th straight month in December.
An index of consumer prices fell 0.85 per cent last month from a year earlier, exceeding the 0.76 per cent drop expected by economists, according to data released Monday by the Ministry of Commerce in Nonthaburi outside Bangkok.
"The oil price is a key risk factor for inflation," Somkiat Triratpan, the ministry's head of trade policy and strategy, said at a media briefing. "Inflation should be back to positive in 1Q, but there's uncertainty because oil prices are lower than our estimate."
Crude oil futures slid 11 per cent in December and some forecasters expect prices to fall as low as US$15 a barrel amid slowing economic growth in China. Thailand relies on oil imports for more than 80 per cent of its energy needs, according to state-controlled PTT Exploration & Production Pcl.
"Disinflationary pressures will likely persist into early 2016 on account of structurally lower oil prices and soft domestic demand," Weiwen Ng, a Singapore-based economist at Australia & New Zealand Banking Group said Monday in an interview, adding that inflation should bottom out in Thailand in the coming months.
Thailand's core inflation, which excludes energy costs, fell to 0.68 per cent in December from 0.88 per cent in the previous month.
In Indonesia, inflation slowed to 3.35 per cent in December, the country's statistics office said ON Monday. That's the lowest level since at least January 2010, according to data compiled by Bloomberg. Thai inflation should average 1 per cent to 2 per cent this year if oil prices range from US$48 to US$54 per barrel, the commerce ministry said.