April prices moving at the right clip for 1.2% inflation goal
A SLIGHT dip in the consumer price index (CPI) for last month has kept inflation on track to meet the 1.2 per cent growth target for this year set by the Commerce Ministry.
“The Commerce Ministry is maintaining its target inflation bracket for 2019 at between 0.7 and 1.7 per cent, with a mean of a 1.2 per cent rise in prices,” the director-general of the Commerce Ministry’s Trade Policy and Strategy Office, Pimchanok Vonkorpon, said after the April CPI increased 1.23 per cent year on year, down from the 1.24 per cent year-on-year expansion for March.
The CPI rose 0.44 per cent from the reading in March and by 0.86 per cent over the first four months of 2019, Pimchanok said at a press conference yesterday.
The expansion in the index is primarily due to rises in the indices for fresh food and energy.
The index for raw food increased 3.3 per cent as a result of low crop yields. This was caused by the worsening weather in the summer, with many agricultural areas in the country facing drought, Pimchanok said.
As the temperature rises, the yields of food crops such as vegetables decrease. In turn, the rate of spoilage in these fresh products increases. This lowers the supply of the products and causes price rises in the market, Pimchanok said.
However, she noted that the reduced supply of fresh food had not reached point where shortages were occurring in the market.
The index for energy rose for a second consecutive month, reaching 2.33 per cent, in line with an upward trend in world energy prices due to cuts in oil production abroad.
In a separate interview, Standard Chartered Bank economist Tim Leelahaphan cautioned that the rise in oil prices may lead to higher than expected inflation in Thailand.
“We predict that the annual average inflation level for 2019 will be 1.5 per cent, and we will have to keep a close eye on the oil price situation,” he said.
The economist concurred with Pimchanok, saying that the rising temperatures and drought in some areas would cause some perishable goods to become costlier in the next few months.
On the flipside, the prices for some types of fruit have fallen as a result of the hot weather. Plantations of some varieties have borne fruit at a faster rate, leading to increased supply and a corresponding drop in prices. The index for fruit fell by 0.5 per cent.
