Headline inflation in Thailand rose by 1.08% year-on-year in February, fuelled by price increases for food, especially fresh fruit, food ingredients and ready-to-eat meals as well as non-alcoholic beverages.
The consumer price index (CPI) for February was 100.55, rising from 99.48 a year earlier, said Poonpong Naiyanapakorn, director-general of the Trade Policy and Strategy Office at the Ministry of Commerce.
Prices in the food and non-alcoholic beverage category rose 2% year-on-year, primarily driven by fresh fruit, ready-to-eat meals, non-alcoholic beverages, food ingredients, flour-based products and egg and milk products.
Prices in non-food and beverage categories increased by 0.4% year-on-year, mainly due to higher fuel prices, electricity, housing rent and international airfares.
Mr Poonpong said core inflation, which excludes fresh food and energy prices, increased by 1% year-on-year in February, accelerating from 0.83% in January.
He said inflation in March is expected to be similar to that of February.
He identified three factors fuelling inflation, including a price ceiling of 33 baht per litre for diesel, which is higher than in the same period last year.
The ongoing tourism boom has also driven up prices for related goods and services, particularly airfares, said Mr Poonpong.
In addition, prices of upstream raw materials for certain agricultural products remain high, especially for coffee, palm oil and coconuts.
“Inflation for the first quarter is projected to be 1.1% to 1.2% year-on-year, dipping to 0.5% in the second quarter due to a higher base last year and falling prices of certain food products, a result of government initiatives aimed at easing the cost of living,” he said.
Mr Poonpong said some factors could reduce overall inflation, such as a decrease in Dubai crude oil prices in the global market, which would likely lower domestic gasohol prices.
Moreover, the government is expected to continue introducing measures to ease the cost of living.
He said favourable weather conditions for cultivation are expected to lead to a greater supply of fresh vegetables this year.
Large businesses are also conducting marketing activities aligned with government stimulus measures.
Asked whether the decline in inflation reflects weak purchasing power, Mr Poonpong highlighted the connection between purchasing power and high household debt, which is currently at 89% of GDP.
The ratio has been steadily increasing since the pandemic, affecting household purchasing power.
He said inflation is expected to remain at the lower end of the Bank of Thailand’s target range of 1-3%. However, further assessments are required going forward.
