Food prices to jump
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Food prices are expected to increase 11.9 per cent in the last two months of this year because of irregular acceleration in demand, against 7.9 per cent in September, according to TMB Bank's research centre, TMB Analytics.
As food constitutes 15 per cent of the inflation basket, this could push headline inflation this year up to 5.1 per cent, it added, referring to the experience in the aftermath of the 1995 floods.
In that year, several provinces were inundated and the flood waters remained for four months. Demand for food and drinking water, as well as construction materials, spiked. The cost of a sandbag rose to Bt50 from Bt20Bt30. Meanwhile, supply disruption was severe, as floods damaged agricultural areas and industrial plants.
In the fourth quarter of 1995, inflation hit 7 per cent, up from 56 per cent in the three preceding quarters. The food price index rose 15 per cent in the quarter, from 10 per cent in September.
