Thailand: Selected Issues
May 31, 2017
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This Selected Issues paper analyzes factors that could bring inflation back to target in Thailand. The paper estimates a hybrid New Keynesian Phillips curve with time varying parameters to gauge the quantitative role of (long-term) inflation trends, economic slack, and import price inflation in shaping inflation dynamics. The analysis reveals some important changes in Thailand’s inflation dynamics. It suggests that the impact of lower import prices was a major factor behind the decline in headline inflation in 2015, with low oil prices the largest contributor to inflation dynamics. Monetary policy easing, within a broader expansionary policy mix, should help bring inflation back to target.
Subject: Balance of payments, Current account, External balance assessment (EBA), External position, Inflation, International trade, National accounts, Prices, Private investment, Terms of trade
Keywords: Asia and Pacific, CR, Current account, External balance assessment (EBA), Global, Inflation, inflation dynamics, inflation expectation, ISCR, monetary policy, Private investment, savings-investment perspective, Sub-Saharan Africa, Terms of trade, Thailand, Thailand's current account norm, trend inflation estimate
Pages:
22
Volume:
2017
DOI:
Issue:
137
Series:
Country Report No. 2017/137
Stock No:
1THAEA2017002
ISBN:
9781484301845
ISSN:
1934-7685
