The information below has become available following the issuance of the staff report (SM/17/100). It does not alter the thrust of the staff appraisal.
Headline inflation decelerated to 0.4 percent year-on-year in April, somewhat weaker than projected by staff, given low fresh food prices and a further slide in core inflation (to 0.5 percent). Staff’s projection of 1 percent average headline inflation for 2017 requires timely execution of the fiscal stimulus and a pickup in private domestic demand. Staff continues to see substantial downside risks to inflation.
The current account balance in the first quarter of 2017 reached US$13.3 billion (3.0 percent of GDP), in line with staff’s projection. The trade balance reached US$8.8 billion (2.0 percent of GDP), with rising goods imports (15.9 percent over the same quarter of 2016) exceeding the increase in exports (6.6 percent).
Gross international reserves as of end-March stood at US$207.5 billion (including a net forward position of US$26.6 billion), nearly US$10 billion higher than at end-2016. This reflects mainly a still favorable current account balance during the first quarter, together with significant capital inflows in January.
The baht appreciated in real effective terms by 2.6 percent in the first quarter of 2017 relative to 2016.