Consumers to face higher prices

The price hikes are expected although the producers project that private consumption and invest¬ment would slow down in the sec¬ond half of the year.

According to the survey, 27.3 per cent of the business operators would raise retail prices over the next few months, 16 per cent in the next 36 months and 14 per cent in the next 612 months. 42.7 per cent of the producers, however, have not yet made decision whether to raise the prices.

However, the consumers would not much carry the burden because most producers said they will push away the rising cost only less than 50 per cent of the rising variable cost. The private sector forecasts their cost will jump by six per cent.

Only 69.9 per cent of the com¬panies have already raised the retail prices, of which about 55 per cent have increased the prices less than 50 per cent of rising variable cost.

They have not much increased the prices because they have wait¬ed for approval of price adjustment from the Ministry of Commerce. The price rises are also limited amid fierce competition, according to the BOT's inflation report.

"The cost passthrough will take time because the producers have bear the most of escalating cost in the short term. The cost passthrough as well as the producers' expectation on the cost hikes over the next 12 months will put pressure on the inflation expectation in the future," the report said.

Moreover, 34.6 per cent of pro¬ducers plan to adjust the wholesale prices within next 13 months, 17 per cent in 36 months and 14.8 per cent in 612 months. But 33.5 per cent of them have not had a concrete plan whether to raise the prices.

67.1 per cent of the producers have already hiked the wholesale prices. Most of them have increased the prices less than 50 per cent of the rising variable cost.

According to the survey, the business sector acknowledged that financial cost accounts the lowest the variable cost at 6.4 per cent.

Raw material cost registers the highest pace of 31.8 per cent, fol¬lowed by energy cost of 24.4 per cent, labour cost 22.6 per cent and transportation cost 14.7 per cent.