December inflation shows rapid gain
Consumer prices rose at the fastest pace in 25 months in December, driven by fuel, food and non-alcoholic drinks.
The Commerce Ministry said yesterday that the consumer price index, based on 450 products and services, rose for the ninth straight month in December, surging 1.13% year-on-year after increasing 0.6% year-on-year in November, 0.34% in October, 0.38% in September, 0.29% in August, 1% in July, 0.38% in June and 0.46% in May.
For all of 2016, consumer prices rose 0.19%, staying within the Commerce Ministry's target of 0-1%.
Pimchanok Wonkorporn, director-general of the Trade Policy and Strategy Office, said the higher prices in December were largely due to a hike in tobacco and alcohol prices, which surged 13% year-on-year. Cigarette prices, in particular, rose 28% year-on-year in December, reflecting an excise tax hike in early 2016.
Price increases were also found in transport, communication, food and non-alcoholic drinks.
Prices increased 0.13% on a monthly basis from November, mainly because of higher costs for transport, communications, tobacco and alcoholic drinks.
Core inflation, which excludes food and energy prices, was 0.74% on an annual basis in December, with the rate for the whole year 0.74% as well.
Of the 450 items tracked, 146 items saw price increases, including oil, seafood and dry foods, garlic and onion, with prices of 104 items falling.
The ministry predicted inflation of 1.5-2% in 2017 on expected economic growth of 3-3.5%, a Dubai crude oil price of US$45-55 a barrel and a foreign exchange rate of 35.50-37.50 baht to the US dollar.
"The surge in consumer prices, which hit a 25-month high, clearly reflects a recovery in consumer spending and the economy," Ms Pimchanok said.
She said the Commerce Ministry still needs to closely monitor oil prices and the impact of the ministry's new inflation calculation system to reflect the real costs of consumers' daily spending.
The ministry plans to apply a new way of calculating the country's inflation rate this year, dropping some product items and increasing the number of service items such as WiFi and mobile phone service charges.
The calculation is currently based on 450 products and services.