February inflation eases to 0.74%

February inflation eases to 0.74%

Raw food is one of the items whose prices rose last month. (Bangkok Post photo)
Raw food is one of the items whose prices rose last month. (Bangkok Post photo)

Consumer prices, a gauge of headline inflation, rose by 0.74% year-on-year in February, boosted by food and non-alcoholic beverages.

The rate, however, decelerated from January’s eight-month high of 1.05%, which had been driven by higher raw food and energy prices.

Pimchanok Vonkorpon, director-general of the Trade Policy and Strategy Office, said on Thursday the major contributors in February were higher prices in all categories of food and non-alcoholic beverages, especially for raw food, prepared food, and seasoning and condiments, partly due to drought.

Non-food and beverages prices edged down 0.01% in February, caused by a drop in prices for transport and communication, retail fuel, and apparel and shoes.

On a month-to-month basis, consumer prices in February fell 0.08% from January.

According to Ms Pimchanok, prices excluding food and energy (core inflation) rose by 0.58% in February, quickening from 0.47% in the previous month.

For the two-month average, headline inflation and core inflation were 0.89% and 0.53% respectively.

Ms Pimchanok said the decelerating inflation stemmed from the recent global economic slowdown and concerns that the coronavirus epidemic would hit tourism, transport, retail and wholesale trade, as well as other related manufacturing and services.

Considering other related indicators, however, promising signs could be seen in agricultural prices and farmer income, especially for oil palm.

In addition, revenue from domestic value-added tax and private consumption has risen continuously.

January exports were higher for the first time in five months. Those figures show that the economy has strong potential to recover when the circumstances return to normal, Ms Pimchanok said.

The Commerce Ministry has forecast headline inflation of 0.4-1.2% for 2020.

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