INFLATION
CPI climbs 5.7% in Q1 as fuel cost jumps
Authorities expect prices to remain unchanged at 3.5-4.5% for rest of the year
The country's consumer price index (CPI) increased 5.7 per cent in both year-on-year and first-quarter analysis, driven by rising fuel and food prices, the Commerce Ministry announced yesterday. It said inflation would remain unchanged at the projected 3.5 to 4.5 per cent for the rest of the year. Karun Kittisataporn, the ministry's permanent secretary, said the Bank of Thailand's policy to increase interest rates would convince consumers to focus more on savings rather than spending. And this would reduce inflation in the coming months, he said. CPI figures are based on many factors, including: the country's estimated economic growth of 4.5 to 5 per cent, the cost of oil at US$55 to $60 per barrel, an exchange rate of Bt40 to the dollar, a minimum labour wage of Bt190 per day, an interest rate of 4.5 to 5 per cent and the domestic price of oil at Bt27.43 per litre. The 5.7-per-cent rise in the CPI is an increase of 1 per cent from February, while, inflation surged 5.7 per cent in the first quarter. The rate of inflation last month showed a 1-per-cent increase from February due to the drought that affected the price of fruit and vegetables. However, the price of fresh food will drop soon because the rainy season is coming, Karun said. Prices in the food and beverage sector increased 2.1 per cent as a result of the rising price of pork, seafood, milk, vegetables, fruit and sugar. In non-food and drink sectors, prices also increased by 0.3 per cent. The price of oil rose three-fold last month, but the price of some products, such as detergent, toothpaste, and shampoo, decreased. Core inflation in March increased by 2.6 per cent from the same period last year. The ministry expects inflation in the second quarter to increase at the same level as in the first quarter, while it expects a drop during the third and fourth quarters. "The ministry's price control measures for consumer goods has been implemented to curb inflation. "Price increases will be approved when production costs increase more than manufacturers' profits," Karun said.
Petchanet Pratruangkrai The Nation
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