BANGKOK (NNT) – Thailand’s inflation rate fell for the fifth straight month in May amid lower electricity and fuel prices. However, experts warned that inflation could rebound due to a possible increase in minimum wages and the upcoming drought season.
Wichanun Niwatjinda, Deputy Director of the Trade Policy and Strategy Office, reported that the country’s inflation rate fell to 0.53% in May – the lowest in 21 months. Non-food and non-drink prices fell 1.83% despite increases in vegetable and egg prices due to reduced production. Meanwhile, the price of processed food has increased as a result of higher production costs.
Despite the low inflation rate, the deputy director warned various factors – such as the upcoming drought season, which would disrupt production, and the proposed minimum wage increase, which will affect production costs – could cause inflation to rise in the coming months.
The Thai National Shippers’ Council meanwhile reported that industrial exports, including electronic equipment and appliances to the U.S. and China, decreased by 7.6% in April year-on-year. It forecast that export growth would decrease by 1% year on year in 2023, urging the new government to promote more exports while taking care not to jeopardize small and medium-sized firms while adjusting policy rates.
One of the main reasons for the falling inflation rate in Thailand is the drop in oil prices in the global market. Oil prices have been affected by the oversupply from major producers, such as Saudi Arabia and Russia, and the weak demand due to the COVID-19 pandemic and its impact on economic activity.
Comparison with other countries
The inflation rate in Thailand is relatively low compared to other countries in Southeast Asia and the world. According to data from World Bank , Thailand ranked 13th out of 15 countries in Southeast Asia in terms of average annual inflation rate from 2016 to 2020 (1.4%), higher only than Brunei Darussalam (0.2%) and Singapore (0.6%). The highest inflation rate in the region was recorded by Myanmar (6.8%), followed by Laos (5.4%) and Vietnam (3.6%). The regional average was 2.7%.
In terms of global ranking, Thailand ranked 136th out of 196 countries in terms of average annual inflation rate from 2016 to 2020 (1.4%), lower than the world average of 3.1%. The highest inflation rate in the world was recorded by Venezuela (1,698.9%), followed by Zimbabwe (175.6%) and Sudan (54.3%). The lowest inflation rate was recorded by Libya (-8.7%), followed by Burundi (-3.9%) and Ecuador (-1.2%).
Information and Source
National News Bureau : http://thainews.prd.go.th
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