Inflation attached to energy prices after April cooling

Thai inflation in May is expected to rise in lockstep with energy prices, which remain at a high level compared with 2021, after the headline rate increased 4.65% year-on-year in April, according to the Commerce Ministry.

Inflation attached to energy prices after April cooling
Business

Inflation attached to energy prices after April cooling

published : 5 May 2022 at 17:24

newspaper section: Business

writer: Phusadee Arunmas

Thai inflation in May is expected to rise in lockstep with energy prices, which remain at a high level compared with 2021, after the headline rate increased 4.65% year-on-year in April, according to the Commerce Ministry.

Ronnarong Phoolpipat, director-general of the Trade Policy and Strategy Office, said the main contributors to inflation in May will be the end of the diesel price subsidy scheme, which ran from October 2021 to April 30, and a gradual increase in the price of cooking gas (liquefied petroleum gas) from April to May 2022.

In addition, commodity prices have been rising, especially fresh food and food items, because of the high cost of production and ingredients, he said.

Mr Ronnarong said global prices of energy and commodities, the West’s sanctions on Russia, the Covid-19 situation and climate change are all factors that will affect inflation in the future and should be closely monitored.

“The Commerce Ministry projects inflation in 2022 to move between 4.0-5.0% [a median of 4.5], which is in line with the current situation,” he said. “If there are any significant changes, the figure would be revised again.”

The ministry reported headline inflation, gauged by the consumer price index (CPI), rose 4.65% in April year-on-year, which was lower than expected. This was a deceleration from 5.73% the previous month, thanks to slower growth of energy prices (fuel, electricity and cooking gas), food prices (eggs, pork and chicken), and other items (cleaning supplies and personal care products).

In addition, some items posted falling prices, such as rice, fresh fruit (tangerines, mangoes and bananas), clothes and tuition fees.

According to the ministry, CPI rose on a monthly basis by 0.34% from March, which was the lowest growth this year, resulting from a slight increase in the price of fresh vegetables, fresh fruit, pork and eggs.

Energy prices fell and the rate of increase in food item prices eased. The decrease in prices was partly due to the diesel price cap and several measures from the Commerce Ministry and other organisations, especially in terms of price controls and caps on essential goods.

Core CPI, which excludes raw food and energy prices, rose 2% year-on-year in April, on par with the rate in March.

For the first four months this year, headline inflation rose 4.71% from the same period of 2021, with core inflation increasing 1.58% year-on-year.

Do you like the content of this article?