Photo: IRRI Images via Flickr
Last night, Thailand and Indonesia both reported inflation numbers than came in less hot than anticipated.In Thailand, year-over-year inflation rose 2.87%, but the month-over-month number rose only 0.4%. The country has been engaged in tightening policy, and now looks to have its inflation back within its desired range. The big worry, however, is that the government is only confident it can stay within range if three factors don’t change, one of which is the price of crude oil in Dubai.
Indonesia’s inflation rate is still high, at 6.84% year-over-year, but has slowed from January and only rose 0.13% month-over-month in February. High inflation continues to be blamed on food prices, which have spiked due to poor harvests.
But the big problem, as told by the Thais, is the threat of rising oil prices from instability in the Middle East. That could make what seems to be an improving situation again look rough rather quickly.