Inflation in 2015 lowest in six years
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INFLATION last year hit the lowest rate in six years at negative 0.9 per cent, due mainly to dropping oil prices, while the Commerce Ministry expects this year’s inflation to inch back into positive territory, at 1-2 per cent, on stronger economic growth
But global oil prices could affect that forecast, the ministry acknowledged.
The ministry yesterday reported that the Consumer Price Index last year dropped by 0.9 per cent, compared with 2014’s 1.89-per-cent expansion. The CPI in December decreased by 0.85 per cent year on year, and by 0.39 per cent compared with November, mainly on falling fuel prices and some food-price reductions.
“The CPI declined significantly in 2015 due to dropping oil prices. However, inflation is expected to increase this year on stronger economic growth, while the baht will continue to depreciate. Oil prices could still be a key factor influencing the inflation rate this year,” said Somkiat Triratpan, inspector-general of the ministry and director of the Trade Policy and Strategy Office.
Higher inflation would reflect rising consumer purchasing power, more trade and rising prices of some consumer goods, he added.
Somkiat thinks inflation could return to positive growth in the first quarter of the year.
Full-year inflation in 2015 |was the lowest since 2009, when |the government launched mea-sures to reduce the cost of living, while the global oil price shrank |to an average of US$61.70 per |barrel, from $94 in 2008.
The average oil price last year was $51 per barrel, compared with $96.80 in 2014. At one point last month, the price declined to $34.27 per barrel.
The ministry’s inflation forecast of 1-2 per cent for 2016 assumes the Dubai oil price at $48-$54 per barrel for the whole year. It also expects gross domestic product to grow by 3-4 per cent this 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 0.83 per cent, while the non-food index headed down 1.78 per cent.
Based on 450 goods in the ministry’s inflation-calculation basket, the prices of 157 goods increased last month, such as poultry, fruits and vegetables, cooked food, fast food, and dining out, while the prices of 103 items decreased, including dairy products, eggs, and seasoning, and prices of 190 items were unchanged.
Core inflation, which excludes volatile fuel and food prices, was 1.05 per cent for the whole of 2015, within the central bank’s target range of 0.5-3 per cent.
Core inflation in December was 0.68 per cent year on year, and minus-0.02 per cent month on month.
