THE road to the general election set for February 24 is expected to boost consumer spending and encourage healthy inflation growth for the first quarter of 2019, Pimchanok Vonkorpon, director-general of the Trade Policy and Strategy Office (TPSO), said yesterday.
The prediction for inflation for the four quarters of 2019 are for 0.86, 0.98, 1.27 and 1.81 per cent, respectively, according to the TPSO, which is under the Commerce Ministry.
However, the predicted figure in the first quarter has yet to account for the impact of the upcoming general election on domestic consumption.
“The general election is expected to have a positive impact on domestic consumption as the different political parties invest in their election campaigns,” Pimchanok said.
“Particularly, we expect consumption of wood and pickup trucks, key instruments in election campaigns, to rise in the first quarter of 2019,” she said. “These trends are expected to be reflected on the first quarter’s CPI figures.”
“Therefore, inflation in the first quarter could very well exceed the predicted figure of 0.86 per cent.”
The TPSO predicted that the annual Consumer Price Index (CPI) for 2019 would be at around 0.7 to 1.7 per cent, citing rising investments, domestic consumption, oil prices and the baht as key contributors.
The GDP for 2019 is predicted to grow between 3.5 and 4.5 per cent, according to the Office of the National Economics and Social Development Council (NESDB).
“Investment in from both the private and public sectors is expected to grow significantly in 2019,” Pimchanok said.
Total investment is expected to grow by up to 5.1 per cent in 2019 compared to 3.6 per cent in 2018, with private investment growing by 4.7 per cent and public investment growing by up to 6.2 per cent, according to the NESDB.
“Domestic consumption is also predicted to be at a healthy level in 2019,” Pimchanok said.
The NESDB predicts private consumption will grow by 4.2 per cent and government consumption by 2.2 per cent.
“Another key contributor to the healthy inflation level prediction for 2019 is the price of oil, which is predicted to be in a range between $70 (Bt2,261) to $80 per barrel,” Pimchanok said.
The final key influencer on the CPI figures for 2019 is the strength of the baht, which is expected to hold at between 32.5 and 33.5 to the US dollar in 2019, according to the director-general.