Thailand
Thailand: Food, energy prices drive inflation higher
Consumer prices, a gauge of headline inflation, rose to an eight-month high in January, driven by higher raw food and energy prices.
The Commerce Ministry said yesterday that overall consumer prices rose by 1.05% from the same month of last year, quickening from a 0.87% year-on-year rise in December, 0.21% in November and 0.11% in October.
The largest upward contributions stemmed from raw food and energy prices, while other product and service prices continued to expand modestly as expected, said Pimchanok Vonkorpon, director-general of the Trade Policy and Strategy Office.
“The price movements were in line with demand and supply situations, with key factors including weather change, higher demand from the Chinese New Year festival and government expenditure, as well as the global economic situation,” Ms Pimchanok said.
Food and non-alcoholic beverage prices rose by 1.8%, primarily due to a surge in the index for rice, flour and flour products of 8.3%, led by milled glutinous rice, as production fell.
Moreover, the index for meats, poultry and fish increased 3.5%, while the index for fruits (tangerine, guava, Pisang Awak banana) rose 3.5%, owing to higher demand for Chinese New Year.
The index for eggs and dairy products (chicken eggs, milk, duck eggs) rose 1.5%, while the index for non-alcoholic beverages (carbonated drinks, sugary drinks, chocolate drinks) climbed almost 2% due to the increase in tax on sugary drinks since October.
According to Ms Pimchanok, the index for non-food increased by 0.6%. This was primarily caused by the rise in the indices for transport and communication, up 1.3%. Retail fuel and public transport services were up 2.4% and 5.9%, respectively.
On a month-to-month basis, CPI in January 2020 rose 0.16% from December.
Core CPI, which excludes raw food and energy prices, rose 0.47% year-on-year in January and 0.02% month-to-month from December.
Of the 422 product and service items used to gauge inflation, prices of 238 items (including milled sticky rice, eggs, fresh fruits and public transport) rose last month.
No price changes were registered for 78 items, while 106 (including lemons, onions, tomatoes and powdered milk) saw prices drop.
Ms Pimchanok said the deadly coronavirus outbreak delivered a slight impact on consumer prices in January. She acknowledged that a higher impact is anticipated in February because of decreasing spending and a delay in the fiscal 2020 budget.
“Energy prices are likely to substantially contribute to inflation, particularly in the first quarter,” she said. “Food prices will also continuously rise following predicted drought, while other products and services are expected to move normally.
“Together with these, private investment and government expenditures via stimulus measures and subsidy schemes for particular groups will be key supports to broaden domestic demand for the remaining period of the year. Therefore we [the office] have estimated that the inflation rate for 2020 will average 0.8% [range of 0.4-1.2%], which is sufficient and appropriate to maintain economic growth under the current situation.”
Source: https://www.bangkokpost.com/business/1852249/food-energy-prices-drive-inflation-higher