Prime Minister Yingluck Shinawatra Saturday tried to alleviate fears of high prices for food and consumer products, promising the economic situation will turn around in June.
She has also instructed state agencies to cut energy consumption by 10% to deal with soaring fuel prices.
Ms Yingluck said the rising cost of living was a short-term problem resulting from the flood disaster, which has held back production and caused price speculation by traders who expected supply shortages after the floods.
The balance of supply and demand will soon be restored and pressure on prices will ease as manufacturers resume operations, she said.
"We've examined the outlook and agreed that things should ease in June when production is back to full capacity," she said in her weekly national address.
Citing Commerce Ministry price surveys, Ms Yingluck said in general consumer goods prices are not higher than they were during the same period last year.
But when compared with the final quarter of last year when the flood crisis cut production, prices were clearly higher.
The Commerce Ministry will launch a campaign of low-cost goods under the Blue Flag scheme this month.
"I'd like to see One Community, One Blue Flag. We don't want to take over from businesses, but we want to set fair prices," Ms Yingluck said.
The prime minister also said the authorities would ensure reasonable prices for eggs and cooking palm oil.
The government is doing its best to maintain prices, but eventually it will come down to market mechanisms, she said. State agencies have been asked to cut fuel consumption by 10% to reduce costs, while use of alternative energy will be explored.
Suthep Liumsirijarern, director-general of the Energy Policy and Planning Office, said measures to cut energy consumption by state agencies by 10% will be put to the cabinet on Tuesday.
Commerce Minister Boonsong Teriyapirom said the ministry was keeping an eye on production costs, especially for goods directly affected by fuel prices.
He said cooking palm oil manufacturers recently sought to raise prices but the government refused.
The Energy Ministry was asked to import crude palm oil at 30 baht per kg for local production to ease pressure, he said. The Commerce Ministry wants to make sure the retail price stands at no more than 42 baht a litre.
He said the ministry conducted price surveys on necessities such as eggs and sugar and found they were within a reasonable range.
Democrat Korn Chatikavanij blamed the rising cost of living on the government's mishandling of policies, especially the slashing of contributions by refineries to the State Oil Fund.
Mr Korn said the short-term cuts had plundered 20 billion baht from the State Oil Fund and caused a sharp drop in cassava prices, a crop used in the production of gasohol.
"The government seems to think there is free stuff. But there is no free lunch. After slashing contributions, petrol prices dropped to almost the same level as gasohol, pushing down the cassava price. Since the government signalled it will raise the minimum wage to 300 baht and the salary of new graduates to 15,000 baht, goods prices have been rising," Mr Korn said.
He lashed the government for lowering the threshold for consumers to be eligible for free electricity, affecting about four million households.