Thailand's Inflation Rises in April 2024 Amid Soaring Fuel Prices

Thailand's inflation rate increased for the first time in seven months in April 2024, driven by soaring fuel prices and higher agricultural product prices caused by extreme hot weather. The consumer price index (CPI) rose by 0.19% in April compared to the same period last year, following a 0.47% year-on-year drop in March, according to data released by the commerce ministry on Friday.

Why this matters: This increase in inflation has significant implications for Thailand's economy, as it may affect consumer spending and business investment. Moreover, it could also impact the country's monetary policy, as the central bank may need to adjust interest rates to curb inflation.

Despite the increase, the inflation rate remains below the central bank's target range of 1% to 3% for the 12th consecutive month. The core CPI, which excludes volatile food and energy prices, rose 0.37% in April. Poonpong Naiyanapakorn, Director of the Trade Policy and Strategy Office, attributed therisein inflation to a low base for electricity prices last year, the increase in agricultural prices due to extreme hot weather, and a weak baht.

Out of the 430 items used in the inflation rate calculation, prices of 279 items have increased, 53 remain unchanged, and 101 items have dropped. Food and non-alcoholic drinks saw a 0.2% increase, while non-food and alcoholic drink items rose by 0.12%, mainly due to increased prices of gasohol 95 and 91, E20, and benzine 95. However, prices of pork, mackerel,vegetable oil, and garlic have decreased.

Looking ahead, Poonpong predicts that inflation in May will increase by 1.0%-1.5% compared to the same period last year, mainly due to price increases of several agricultural products. He expects inflation to increase steadily but minimally over the remaining eight months of 2024."In the second quarter,story, inflation, rises, slightly, first, time, moinflation is expected to be in a range of 0.8-1%,"Poonpong stated.

The commerce ministry maintained its inflation forecast for the year between 0.0%-1.0%. However, Poonpong warned that the minimum wage increase to 400 baht and the 10,000 baht payments in the "digital wallet" scheme may increase inflation further, but it will still be within the 1% range, assuming economic growth between 2.2% and 3.2%, global crude oil prices between 80 and 90 US dollars per barrel, and a baht currency exchange rate between 34.5-36.5 baht against the US dollar.

inflation, rises, months, falling, pricesThailand's headline inflation rise in April 2024 marks a significant development in the country's economic landscape. The increase, driven by soaring fuel prices and higher agricultural product prices, is expected to continue in the coming months. However, the commerce ministry remains optimistic, maintaining its inflation forecast for the year between 0.0%-1.0%.

Key Takeaways

• Thailand's inflation rate rises 0.19% in April 2024, first increase in 7 months.
• Fuel prices and hot weather-driven agricultural prices drive inflation.
• Inflation rate remains below central bank's 1%-3% target range.
• Core CPI rises 0.37% in April, with 279 out of 430 items increasing in price.
• Inflation forecast for 2024 remains between 0.0%-1.0%, with steady growth expected.