April consumer prices dive

April consumer prices dive

Energy prices are a major factor behind the biggest fall in a decade of the consumer price index last month. (Bangkok Post file photo)
Energy prices are a major factor behind the biggest fall in a decade of the consumer price index last month. (Bangkok Post file photo)

The consumer price index (CPI), a gauge of headline inflation, fell 2.99% year-on-year in April, the biggest decline in 10 years and nine months.

The major contributions came from energy prices, which saw the biggest drop in 11 years and two months, and discount goods and services under the government's measures aimed at reducing the cost of living during the coronavirus crisis.

Raw food prices continued to rise, but at a decelerated rate, due to drought and the low level of total consumption in the wake of the outbreak. Prices of other goods and services moved in line with consumers' precautionary behaviour.

Prices for all items excluding food and energy grew by 0.41% from April last year.

For the first four months of 2020, headline inflation and core inflation were -0.44% and 0.50% respectively.

Pimchanok Vonkorpon, director-general of the Trade Policy and Strategy Office, described the restrictions on economic and social activity during the outbreak as merely ad hoc factors temporarily limiting demand for goods and services. She said manufacturing potential and the competitiveness of the country remain in a healthy mode.

The economic situation and inflation are expected to return to normal once the outbreak eases. But in the post-outbreak situation, severe drought will be the key issue, Ms Pimchanok said.

On a monthly basis, the CPI fell 2.03% in April from March. In the first four months of 2020, the index dipped 0.44% from the same period of last year.

Ms Pimchanok said the coronavirus pandemic and global energy prices are likely to keep propelling inflation in May. A new energy deal in the offing, along with improving virus situations in China and other key countries, could boost energy prices a little.

In addition, particular farm prices are moving higher amid severe drought conditions. The trend could be tempered by continued cautious spending and the high base of some 2019 agricultural prices.

The annual rate of headline CPI in 2020 is projected in a range of-1.0%to-0.2% (averaging -0.6%).

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