Thailand: Selected Issues

International Monetary Fund

No 2017/137, IMF Staff Country Reports from International Monetary Fund

Abstract: 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.

Keywords: ISCR; CR; Thailand; inflation expectation; monetary policy; trend inflation estimate; savings-investment perspective; inflation dynamics; Thailand's current account norm; Inflation; Private investment; Current account; Terms of trade; External balance assessment (EBA); Global; Sub-Saharan Africa; Asia and Pacific (search for similar items in EconPapers)
Pages: 22
Date: 2017-05-31
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