CPI contracts in October year on year for the first time in 25 months


The domestic Consumer Price Index (CPI) in October fell to 107.72, contracting 0.31% compared to the same period last year.

This marked the first decline in the past 25 months, according to Poonpong Nainapakorn, director of the Commerce Ministry's Trade Policy and Strategy Office.

The decline in headline inflation last month is attributed to the decrease in prices of energy and consumer goods, due to the government's cost-cutting measures, as well as lower prices of pork and fresh vegetables compared to the previous year. Excluding fresh food and energy, the core inflation rate increased by 0.66%.

Comparing Thailand's inflation rate with other countries, the latest data from September 2022 shows that Thailand's inflation rate increased by 0.30%, ranking it 8th out of 130 countries that reported their inflation figures. Thailand continues to have one of the lowest inflation rates among Asean nations. In many countries worldwide, inflation rates are slowing down and moving within a narrow range.

The decrease in inflation was also attributed to the continuous decline in the prices of palm oil, coconut (dried/scraped), and wet tamarind due to lower raw material costs. However, some items such as chicken eggs, soy milk, fresh fruits, including watermelon and ripe papaya, along with processed coffee and instant noodles, experienced price hikes.

In other categories excluding food and beverages, prices decreased by 0.09%, reflecting the reduction in the prices of products related to energy, electricity, diesel oil, and cleaning products such as laundry detergent, dishwashing liquid, fabric softeners, and electrical appliances like fans, air-conditioners, and washing machines. These prices have been decreasing consistently due to government assistance programmes, the office said.

Certain items experienced minor increases in prices, including airfare, petrol, liquefied petroleum gas, and personal care products (body powder, toothpaste, tissue paper), mostly due to promotions. Additionally, the prices of hairdressing services for both men and women, medications (fever and pain relievers), cigarettes, alcohol, and wine saw slight increases.

The average CPI over the first 10 months of this year (January - October), rose by 1.60% compared to the same period of last year, falling within the target range of 1%-3% set by the Minister of Finance and the Monetary Policy Committee.

Poonpong said that headline inflation this month was expected to fall slightly compared to the same period last year, due to lower prices of food, animal products, food ingredients, and energy, including essential consumer goods and reduced production costs due to government assistance measures. The stable base prices from the same period of last year also will contribute to the decreasing inflation trend.

However, improvements in the domestic economy from tourism, exports, and higher prices of key agricultural products such as paddy, cassava, and rubber have led to increased incomes for farmers and higher average wages. Additionally, the energy supply situation remains tense due to production and export restrictions by major global oil producers and international conflicts, which could affect inflation differently from the expected trajectory.

The Commerce Ministry expects headline inflation this year at 1% to 1.7%, aligning with the current economic situation.