Thailand’s headline inflation decreased for the second consecutive month in February, primarily due to falling fuel prices, resulting in a decline in the prices of certain products such as fresh and instant foods.
According to the Trade Policy and Strategy Office (TPSO), the average headline inflation is determined based on the Consumer Price Index (CPI), which dropped by 0.12% to 108.05 from the previous month.
Despite the decline in inflation, the office cautioned that Thailand is still at risk of higher inflation due to the ongoing droughts in Thailand and overseas, which could impact energy and food prices. As a result, the TPSO will closely monitor the situation.
Thailand’s inflation was ranked 29th globally among 139 economies as of January-end 2023, outperforming many trading partners, including the United States, United Kingdom, Italy, Mexico, India, South Korea, as well as ASEAN members Laos, Philippines, Singapore and Indonesia.
The TPSO forecasts a continued downward trend in headline inflation for March due to the sustained drop in prices of fresh foods and retail fuel, resulting from the decrease in crude oil prices in the global market. The TPSO also estimated that Thailand’s exports would decrease in March due to a decrease in global demand, resulting from tight fiscal policies and rising inflation in several countries.
Additionally, the TPSO expects electricity bills and cooking gas prices to rise in March due to continued economic recovery, primarily in the tourism sector. The TPSO projects headline inflation in 2023 to be in the range of 2-3% based on the current economic trend, and the office will adjust its prediction if significant changes occur that could affect the economic climate, such as the U.S. Federal Reserve’s monetary policy.
