Consumer prices record major jump

Consumer prices record major jump

Rising prices for fresh vegetables, meat and oil resulted in the highest consumer price index increase in 23 months in November. SOMCHAI POOMLARD
Rising prices for fresh vegetables, meat and oil resulted in the highest consumer price index increase in 23 months in November. SOMCHAI POOMLARD

Consumer prices in November rose at the fastest pace in 23 months, driven by higher costs for food, oil, tobacco and alcoholic drinks.

The Commerce Ministry said yesterday the consumer price index, based on 450 products and services, rose for the eighth straight month in November, surging 0.6% year-on-year after increasing 0.34% in October, 0.38% in September, 0.29% in August, 1% in July, 0.38% in June and 0.46% in May.

Pimchanok Wonkorporn, deputy director-general of the Trade Policy and Strategy Bureau, said the higher prices were largely because of a hike in tobacco and alcoholic drink prices, which surged 12.9% year-on-year.

Prices for fresh vegetables, eggs and pork also jumped because of climate variability, which resulted in lower supply, while domestic oil prices edged up.

Prices shrank 0.6% on a monthly basis from October, mainly because of less costly transport, communications, non-alcoholic drinks and medical care.

Core inflation, which excludes food and energy prices, was 0.72% on an annual basis in November and 0.03% on a month-to-month basis. Headline inflation from January through November was 0.01%, while core inflation was 0.74% for the same period.

Of the 450 items tracked, 123 saw price increases, including food. Prices of 101 items fell.

The ministry is maintaining its 2016 inflation forecast of 0-1% and forecast next year's rate at 1.5-2% based on expected economic growth of 3-3.5%, a Dubai crude oil price of US$44-55 a barrel, and a foreign exchange rate of 35.5-37.5 baht to the dollar.

"The continued rise in consumer prices over the past 11 months reflects a recovery in consumer spending and the economy," she said. "We're bullish that inflation will continue increasing this year propelled by various government stimulus measures and accelerated infrastructure investment."

Ms Pimchanok said the ministry also pledged to closely monitor the impact of daily minimum wage hikes of 3-10% in certain provinces next January. She said the wages hikes are estimated to marginally raise production costs so there is no excuse for traders to raise their prices.

Food and drink prices are expected to rise by 0.8% because of the wage hikes, while the prices of non-food items are estimated to increase by 0.12%.

Next year the ministry also expects higher oil prices from this year's average of $35-45 a barrel.

The cabinet last week approved a daily minimum wage hike by five, eight or 10 baht in certain provinces. The new wages will be effective from Jan 1.

The fresh wage rises are estimated to lift wages in Thailand by an average of 1.7%.

The minimum wage will stay the same in Sing Buri, Chumphon, Nakhon Si Thammarat, Trang, Ranong, Narathiwat, Pattani and Yala provinces.

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