Inflation in Thailand last month was positive for the first time in seven months after the government permitted retailers to raise the price of diesel, while the prices of fresh food and vegetables increased thanks to the recent heatwave.
Poonpong Naiyanapakorn, director-general of the Trade Policy and Strategy Office, said headline inflation in April rose by 0.19% year-on-year, accelerating for the first time in seven months as fuel prices rose in line with the global trend.
The consumer price index (CPI) in April increased by 0.85% month-on-month. The average CPI over the first four months of 2024 declined by 0.55% year-on year.
In addition, the prices of fresh vegetables and fruit increased, attributed to extremely hot weather conditions.
As for other goods and services, their prices moved in a normal direction, he said.
Core inflation, which excludes fresh food and energy, increased by 0.37% year-on-year, which was similar to the level in March.
For May, the office predicts headline inflation will increase, attributed to the low base price of electricity resulting from government measures last year, higher crop prices based on extremely hot weather and drought, rising crude oil prices globally, baht depreciation, high interest rates, and the termination of the government's support measures for fuel and electricity prices.
However, Mr Poonpong said some factors could temper inflation, such as Thailand's slow rate of economic expansion and intense competition among large-scale wholesale and retail traders, along with the growth of e-commerce, leading to the adoption of trade promotion policies, particularly continuous price reductions.
Inflation is expected to rise in a range of 1-1.5% for the remainder of the year as the prices of fuel and agricultural products are still elevated, he said.
"In the second quarter, inflation is expected to be in a range of 0.8-1%," said Mr Poonpong.
In the fourth quarter, the implementation of the digital wallet handout and a hike in the daily minimum wage to 400 baht should affect the inflation rate, he said.
The office is monitoring the situation and awaiting further details, said Mr Poonpong.
The Commerce Ministry predicts headline inflation this year will fall within a range of 0% and 1% (averaging 0.5%), aligning with current economic circumstances.
If there are significant changes, the situation will be reassessed, he said.