Fuel, fares and food put May inflation back in focus

Thailand’s inflation rose again in May, as high domestic fuel prices, transport fares and prepared food costs continued to feed into household expenses, while the Commerce Ministry said the government’s “Thais Help Thais Plus” measure had not created significant price pressure.

Nantapong Chiralerspong, director-general of the Trade Policy and Strategy Office under the Commerce Ministry, said headline inflation increased by 2.79% in May.

The rise was driven partly by domestic fuel prices remaining high amid tensions in the Middle East, including the closure of the Strait of Hormuz and prolonged talks to end the conflict. The situation has also pushed up public transport fares.

Prepared food prices also moved higher as business operators passed rising costs on to consumers, while fresh vegetable prices were above last year’s levels because of a low base in the previous year. Other goods and services had only a limited impact on overall inflation.

Prices in the non-food and non-alcoholic beverage category rose by 4.00%, led by fuel products such as diesel, gasohol and petrol.

Public transport costs also increased, including school vans, air-conditioned buses, passenger vans, motorcycle taxis and airfares. Other items that rose included rent, cleaning-related products and education fees.

However, several items became cheaper, including electricity, personal care products, hotel room rates and some clothing items.

The food and non-alcoholic beverage category rose by 0.95%, driven by prepared meals such as ready-made dishes, noodles, rice with curry and rice topped with stir-fried basil.

Fresh vegetables, plain rice, fresh chicken, seafood and non-alcoholic drinks also increased.

Items with lower prices included pork, glutinous rice, fresh fruit, soft drinks, oyster sauce and dried or grated coconut.

Core inflation, which excludes fresh food and energy, rose by 0.92% in May.

For the first five months of the year, core inflation averaged 0.82%.

Stimulus not seen as major inflation driver

Nantapong said the “Thais Help Thais Plus” measure had played an important role in stimulating spending and restoring consumer confidence at a time when living costs and energy prices remained high.

However, the measure had not added pressure to inflation because many goods had already risen earlier, making most operators reluctant to raise prices further.

Some products affected by higher costs still saw price increases, including meat, duck, chicken and aquatic products.

A survey found that people remained concerned that spending stimulus could lead to higher prices, particularly for prepared food, drinks, fresh vegetables, fresh food and cooking ingredients.

However, the latest data showed that price increases were limited to some categories and had not yet created a significant impact on inflation.

The ministry said previous economic stimulus schemes, such as the co-payment programme, showed that injecting purchasing power into the economy did not necessarily cause a sharp acceleration in inflation.

Such measures could therefore support the economy without creating broad-based price pressure.

One-dish meals show visible price increases

The ministry also surveyed prices of seven popular one-dish meals nationwide: fried rice, pad see ew, rad na, red pork rice, chicken rice, som tam, noodles and rice with stir-fried basil.

The survey covered 1,525 items across the country and found that 316 items, or more than 20%, had increased in price.

The most common increase was from 50 baht to 60 baht, a rise of 10 baht, recorded in 69 items.

That represented an increase of about 20%.

Prices rising from 30 baht to 40 baht represented a larger jump of 33.3%, but were found in only seven items.

Of the 316 food items that became more expensive, 163 items, or more than 51%, increased by only 10 baht.

The ministry said this showed that most price rises remained limited and reflected higher costs rather than the direct impact of government stimulus measures.

Bangkokbiznews