Headline inflation in an even keel thanks to falling food, fuel prices, govt power subsidies

Poonpong Naiyanapakorn, TPSO director-general, told the press on Tuesday that this was the fifth consecutive month for the headline inflation rate to have fallen, and the main reason was that fresh food, including meat and vegetables, was becoming cheaper.

He said dropping fuel prices and subsidised electricity bills were also contributing to the drop in inflation rate. 
The headline inflation rate for the first two months of this year was down by 0.94% when compared to the same period last year. The headline inflation rate in January came in at 106.98, down by 1.11% year on year. 

Poonpong said this rate made Thailand the fourth country with the lowest inflation rates in a list of 135 nations. Thailand’s inflation rate in January was also the lowest among seven ASEAN nations, namely Laos, the Philippines, Singapore, Vietnam, Indonesia and Malaysia.

He said the core CPI or core inflation rate of February rose 0.43% year on year, causing the core inflation rate of the first two months of this year to rise by 0.47%.

Poonpong said the TPSO expects the headline inflation rate in March to continue falling due to the government’s measures to maintain electricity at the subsidised rate of 3.99 baht per unit and diesel at 30 baht per litre until April 19. 

However, if the Gaza-Israel conflict escalates and pushes up the price of fuel and consumer products, headline inflation rate could rise. 

The TPSO, which falls under the Commerce Ministry, expects the headline inflation rate for the first quarter of this year to drop by 0.7-0.8% from the same period of last year, Poonpong added.

The TPSO also maintained its prediction of headline inflation rate for this year at between 0.3-1.7%, he concluded.

Headline inflation stands for inflation in the entire economy and includes commodities like food and energy. It is different from core inflation, which excludes food and energy prices when calculating inflation.