Commerce Ministry revises inflation forecast, amid falling prices

Revising its earlier forecast, the Commerce Ministry now anticipates headline inflation to be within 1-1.7% for the current year, with an average of 1.35%. This comes as a result of expected lowered inflation in the last quarter.

In July, the forecasted range was 1-2% with an average of 1.5%. Poonpong Naiyanapakorn, director-general of the Trade Policy and Strategy Office, revealed that the inflation trend in October and the entire fourth quarter is expected to remain subdued and may turn negative.

“This is due to the reduced prices of food, including meat, poultry, seafood, and seasonings, as well as energy category products like electricity and diesel. A price drop in the gasoline group is also likely.”

Measures taken by the Commerce Ministry, in sync with manufacturers and shopping malls, to reduce the cost of living and lower prices of goods throughout the year, are also set to keep prices in control.

“The baseline last year was at a high level, which may result in inflation remaining subdued or even turning negative.”

Poonpong emphasised the significance of monitoring increasing consumption demand related to the recovery of the tourism sector and export activities, the rise in the average income of farmers and workers, the impact of El Niño on agricultural products in various countries, and the depreciation of the baht, all of which may influence the projected inflation rate.

Inflation increase

Poonpong explained that this new projection is based on a GDP growth of 2.5-3%, Dubai crude oil prices at US$75-85 per barrel, and a foreign exchange rate of 34.5-35.5 baht per dollar.

Yesterday’s reports from the ministry indicated that headline inflation, as measured by the consumer price index, increased by 0.3% year-on-year in September, a slowdown from a 0.88% rise in the previous month. This easing was due to lower energy prices resulting from government support measures and a reduction in food prices, including meat, fresh vegetables, and seasonings.

Core inflation, which excludes unpredictable food and energy prices, rose by 0.63% year-on-year in September, a deceleration from a 0.79% increase in August.

The first nine months of 2023 saw a year-on-year headline inflation of 1.82%, while core inflation averaged 1.50%, reported Bangkok Post.

Poonpong noted that compared to other countries, Thailand in August remained in the “low inflation” group and continued to post the lowest rate in ASEAN among the seven nations that reported their inflation, which includes Laos, the Philippines, Singapore, Indonesia, Vietnam, and Malaysia.

“Inflation rates in many countries around the world are trending lower, particularly in Europe such as the UK, Italy, and Germany.”

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