DECEMBERASIA BUSINESS OUTLOOK9NEWSROOMJAPANESE CORE CONSUMER INFLATION ACCELERATING AT A RAPID PACEThailand's economy showed signs of improvement in October, driven by tourism, exports, and private consumption, bolstered by government economic stimulus measures, according to the Bank of Thailand (BOT). Exports, a critical pillar of the economy, surged by 14.2 percent year-on-year, while imports rose by 17.1 percent, leading to a trade surplus of $1.4 billion. Industrial production also increased, supported by rising domestic demand and exports, excluding the automobile sector.The country recorded a current account surplus of $0.7 billion in October, up slightly from September's $0.6 billion. Private consumption grew by 0.8 percent month-on-month, while private investment increased by 4.5 percent. Additionally, government spending saw a notable rise, contributing to the overall economic activity. Tourism, another key economic driver, provided substantial support to the service sectors, though structural challenges continued to weigh on certain businesses and household incomes.In a surprising move, the BOT reduced its policy interest rate by 25 basis points to 2.25 percent during its October 16 review. It also revised its 2024 GDP growth forecast upward to 2.7 percent from 2.6 percent but slightly reduced its 2025 growth projection to 2.9 percent from 3.0 percent. The economy grew by 3 percent annually in the July-September quarter, marking the fastest pace in two years. However, officials and analysts have raised concerns about sustaining this momentum amid potential challenges in the upcoming year. Core consumer inflation in Japan's capital accelerated in November and stayed above the central bank's 2 percent target in a sign of broadening price pressure, data showed on Friday, keeping alive market expectations for a near-term interest rate hike.The yen rose against the dollar after the data, as market players braced for the possibility the Bank of Japan (BOJ) will raise short-term interest rates from the current 0.25 percent at its next policy meeting in December.The Tokyo core consumer price index (CPI), which excludes volatile fresh food costs, rose 2.2 percent in November from a year earlier, exceeding a median market forecast for a 2.1 percent gain and accelerating from a 1.8 per cent increase in October.Another index that strips away both fresh food and fuel costs, which is closely watched by the BOJ as a better gauge of demand-driven inflation, rose 1.9 percent in November from a year earlier after a 1.8 percent increase in October. The data for Tokyo, which is considered a leading indicator of nationwide price trends, showed households hit by rising rent, utility bills and food costs.Service-sector prices rose 0.9 percent in November from a year earlier after a 0.8 percent gain in October, underscoring the BOJ's view that prospects of sus-tained wage gains are prodding firms to charge more for services. The dollar fell 0.3 percent at 151.125 yen after the data's release. Just over half of economists polled by Reuters expect the BOJ to raise rates again at its Dec. 18-19 meeting. THAILAND SEES ECONOMIC RECOVERY OWING TO TOURISM & CONSUMERISM
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