Disaggregated Inflation Dynamics in Thailand: Which Shocks Matter?
Thai inflation is highly influenced by global economic developments, complicating inflation control. However, since global shocks generally lead to moderate inflation persistence, policymakers can take a less aggressive stance when responding to such shocks.
Research stresses the importance of analyzing disaggregated price data to understand underlying inflationary pressures, recommending flexibility in monetary policy and a focus on medium-term inflation targets to effectively navigate challenges posed by relative price shocks and idiosyncratic price changes.