Inflation 'to inch up next year'
The Commerce Ministry expects next year's inflation rate to inch back into positive territory, at 1-2 per cent, on stronger economic growth, oil prices, and a depreciated baht.
The Consumer Price Index in November declined 0.97 per cent year on year, and 0.32 per cent compared with October, mainly on fuel prices that were down by 21 per cent compared with last year and some food-price reductions.
In the first 11 months, inflation was minus-0.9 per cent, within the range of minus-1 per cent and minus-0.2 per cent expected for the whole year.
"Inflation could increase next year on expectations of stronger economic growth, while the baht will continue to depreciate," said Somkiat Triratpan, inspector-general of the ministry and director of the Trade Policy and Strategy Office.
The higher inflation will reflect rising consumer purchasing power, more trade and rising prices of some consumer goods, he added.
OUTLOOK
The ministry’s 2016 inflation outlook assumes the Dubai oil price at US$48-$54 per barrel for the whole year, compared with $45.90 per barrel as of November 30.
The ministry also expects gross domestic product to grow by 3-4 per cent next year, while the baht will devalue to an average of 36-38 against the US dollar.
Last month, the food and beverage price index was up 0.88 per cent, while the non-food index headed down 1.99 per cent.
Based on 450 goods in the ministry’s inflation-calculation basket, the prices of 153 goods increased last month, such as cooked food, fast food, dairy products, and seasoning, while the prices of 108 items decreased, including pork, eggs and some fresh vegetable, and prices of 189 items were unchanged.
Some goods and services have been increasing in price and will pressure inflation next year, mainly rental fees and construction services and materials.
Core inflation, which excludes volatile fuel and food prices, |was 1.09 per cent in the first 11 months this year, within the central bank’s target range of 0.5-3 per cent.
Core inflation in November was 0.88 per cent year on year, and 0.05 per cent month on month.
A ministry survey on consumer behaviour found that many people had chosen to dine outside or purchase cooked food rather than cook for themselves. Factors influencing this choice are mostly convenience, followed by quality of food and prices.
