A sharp rise in the prices of goods and services following higher costs for production, energy, imported materials and logistics has prompted the Commerce Ministry to raise its forecast for headline inflation to 4-5% this year from a previous estimate of 0.7-2.4%.
The new projection assumes GDP growth of 3.4-4.5% this year, an average Dubai crude oil price of $90-110 per barrel and an exchange rate of 32-34 baht per US dollar.
If there are any significant changes, the figure will be revised again, said Ronnarong Phoolpipat, director-general of the Trade Policy and Strategy Office.
Government measures such as price controls of essential consumer goods, a price cap on fuel and subsidies on utility bills, along with the Covid infection rates are factors that offset the growth of inflation, he said.
Mr Ronnarong predicted headline inflation in April to stay at a high level because of the impact of the Russia-Ukraine war and trade and financial sanctions against Russia by several Western countries.
The Commerce Ministry reported yesterday headline inflation, gauged by the consumer price index (CPI), jumped by 5.73% in March from a year earlier, which was higher than expected and the fastest pace in 13 years.
It was the seventh consecutive month for year-on-year increases, which were recorded at 5.28% in February, 3.23% in January, 2.17% in December, 2.71% in November, 2.38% in October and 1.68% in September, following a 0.02% decrease in August.
According to Mr Ronnarong, the increase stemmed mainly from energy prices, especially fuel and electricity prices, which rose 31.4% and 40%, respectively, in line with global market prices.
Prices of food including meat (pork and chicken), eggs, some fresh vegetables, seasonings and condiments, and prepared food rose due to higher costs of production and ingredients. A low price base last year also led to a high inflation rate, he said.
In the first quarter, consumer prices rose 4.75% year-on-year from the same quarter of 2021 and rose 1.91% quarter-on-quarter from the fourth quarter of last year.
Core CPI, which excludes raw food and energy prices, rose 2% year-on-year in March, accelerating from 1.8% in February.