Fuels, wages under study
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The Commerce Ministry is conducting an impact study on fuel-price increases and rising labour wages.
However, it insisted that the inflation rate would still come in below 3.8 per cent this year as forecast earlier, despite fuel prices exceeding its projection.
“The study is aimed at finding appropriate measures to manage people’s cost of living,” said Vatchari Vimooktayon, director-general of the Internal Trade Department.
Primarily, she is concerned that rising fuel prices will raise the cost of transport, which in turn may result in higher retail prices for some products.
However, the department will not yet allow increases in the controlled prices of any essential goods. The ministry will study costs of production and transport before easing controls. Producers of cooking palm oil recently sought to raise the retail price.
Yanyong Phuangrach, permanent secretary of the ministry, said it would stick with its projection on inflation, as price rises are still under control and the year-on-year inflation rate in the first half is expected to come in at 3.65-3.75 per cent.
However, the ministry will carefully consider whether to raise the projection, as this will influence the central bank on deciding whether to increase its policy rate. If fuel-price rises are only short-term, inflation should stay under the projected cap, he said.
