Electricity, cooking gas costs likely to go up as Thai inflation at 13-month low
Thailand’s average headline inflation in February was at 3.79%, the lowest in 13 months, following a drop in fuel prices, the Commerce Ministry’s Trade Policy and Strategy Office (TPSO) said on Tuesday.
The average headline inflation is based on the Consumer Price Index (CPI), which in February dropped from the previous month by 0.12% to 108.05.
The CPI this year has dropped for the second consecutive month due to the decrease in fuel prices, which also resulted in a drop in the prices of some products, such as instant and fresh foods, TPSO director Poonpong Naiyanapakorn said.
The office had used a relatively high base to calculate inflation in the previous year as a result the year-on-year increase in 2023 is only marginal, he added.
However, he warned that Thailand is still at risk of higher inflation due to the drought both in Thailand and overseas, which would affect the prices of energy and foods. The TPSO will continue monitoring the situation closely, he added.
As of January-end 2023, Thailand’s inflation was 29th in the world among 139 economies who announced their figures. Thailand is doing better than many of its trade partners including United States, United Kingdom, Italy, Mexico, India and South Korea, as well as Asean members Laos, Philippines, Singapore and Indonesia.
The TPSO predicted that headline inflation in March would continue the downward trend following the continued drop in prices of fresh foods as well as retail fuel, the latter as a result of the drop in crude oil price in the global market.
The office estimated that Thailand’s exports in March would contract due to a decrease in global demand as a result of tight fiscal policies and rising inflation in several countries. The office also expected electricity bills and the price of cooking gas to go up in March due to continued economic recovery, especially in the tourism sector.
The TPSO predicted headline inflation in 2023 in the range of 2-3% based on the current economic trend. The office will adjust its prediction should there be any significant changes both in Thailand and overseas that could affect the economic climate, such as the monetary policy of the US Federal Reserve.
