Thailand has made great strides in keeping its inflation rate under control, making it a shining star among Asean countries. According to Poonpong Naiyanapakorn, Director of the Trade Policy and Strategy Office of the Ministry of Commerce, inflation in Thailand is expected to be in the low range of 1% to 2% this year.
Thailand's success in keeping inflation low is also in line with the global trend of lower overall inflation. Not only that, the Consumer Price Index (CPI) for July was 107.82, compared with 107.41 in the same month last year. This represents an increase of only 0.38% year-on-year.
The secret behind this achievement is the decline in food prices, such as pork, which has declined for three consecutive months, as well as the decline in energy prices, which has lasted for five consecutive months. Through these smart measures, Thailand has been able to manage inflation with agility while ensuring that prices remain contained.
Of course, this is good news for the Thai economy and also shows its adaptability to global changes. In a changing world, Thailand has proven to be a formidable player in keeping the economy and prices in balance, an achievement not to be taken lightly.
Looking ahead, the headline CPI may change slightly in August. This will be driven by an increase in some food prices due to the impact of the drought, while energy prices are likely to rise.
Previously, there were some notable price movements in July. Prices of food and non-alcoholic beverages rose by an average of 1.49 percent year-on-year.
Meanwhile, the prices of agricultural products such as eggs, rambutan, vegetables, lime, ginger and tomatoes continued to rise due to unsatisfactory harvests. Poonpong reveals that climate change is behind the low yields.
But the shift is not just in food. Non-food products, including electrical appliances, clothing and smartphones, saw their prices fall by 0.38% compared to the same period last year. Meanwhile, gas prices, public transportation fares, and personal services showed an upward trend over the same period.
Poonpong explained that the underlying inflation rate, which excludes fresh food and energy, increased by 0.86 percent year-on-year. In the first seven months of this year, the inflation rate rose by about 2.19 percent from the same period last year, a figure that remains within the range set by the Office of Fiscal Policy.
However, it is not only the numbers that reflect changes. The consumer confidence index showed a downward trend, falling from 56.1 in June to 53.3 in July. This is the eighth consecutive month of decline due to political uncertainty and rising oil and gasoline prices.
Despite the challenges, Thais' confidence in the strength of the country's economy remains intact. This is due to the continued economic recovery and the tourism sector, which is a source of optimism. Overall, average headline inflation is also expected to remain low at 0.36 percent in the second half of 2023.