April inflation 'lowest' in 28 months as prices, demand hold
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Although consumers are complaining about the current cost of living, the Commerce Ministry yesterday showed that inflation is not only under control but even cooling off.
“Producers can’t raise prices easily because of the stiff competition, while demand for consumer goods is unchanged. Prices should not go up much, as consumers and the private sector are concerned,” Yanyong Phuangrach, permanent secretary of the ministry, said yesterday.
The ministry reported that the Consumer Price Index (CPI) last month was 2.47 per cent above April of last year, when inflation was running at 4.04 per cent. It is the lowest increase in two years and four months, since November 2009.
Month-on-month inflation, at 0.42 per cent, was also lower than March’s 0.59 per cent.
Inflation for the first four months was 3.16 per cent year on year.
The softening of inflation was due to lower food and fuel prices compared with the same period last year, Yanyong said. Raising the daily labour minimum wage to Bt300 in seven provinces will nudge inflation up by only 0.1 percentage point this year, he predicted.
Inflation is expected to be stable next quarter as fuel prices are fluctuating less. The government’s Bt300 wage policy and rising electricity costs will not push inflation up for the remaining months of this year.
This will ensure that inflation will be manageable – at 3.3-3.8 per cent this year – as the government will extend the cost-of-living mitigation measures to September, he said.
The soothing of inflation last month was not something made up, but reflects results from real surveys of the basket of goods and services, Yanyong said.
The ministry’s inflation calculation was based on data from 417 consumer goods and 60,000 respondents nationwide. Its survey found that the retail prices for 161 products had remained steady, for 69 products had decreased and for 187 products had increased last month.
Although there were more products with price increases than price decreases, the average increase was smaller that the average decrease.
The food and beverage price index rose 4.51 per cent year on year, mainly because of expensive fresh fruit and rice. The index for components, excluding food and beverages, and mainly fuel and electricity costs, edged up only 1.18 per cent from 1.23 per cent in March.
Last month, core inflation, which excludes volatile food and fuel prices, was measured at 2.13 per cent year on year and 0.10 per cent month on month.
In the first four months, core inflation was 2.58 per cent year on year – well within the Bank of Thailand’s annual policy target range of 0.5-3 per cent, Yanyong said.
To ease the burden on low-income earners from the cost of living, the Cabinet agreed to a five-month extension of the free public bus and train services to September 30.
