FTI urges maintaining diesel price subsidy

FTI urges maintaining diesel price subsidy

Thailand's inflation rate is expected to stand at 4-5% throughout this year, prompting the need for the government to maintain its diesel price subsidy programme, says the Federation of Thai Industries (FTI).

The estimate is based on the latest survey of 200 executives across 45 industries under the FTI.

Some 50% of respondents believe inflation will be as high as 4-5%, while 43% were more pessimistic, saying the rate will increase to 6-8% amid higher energy prices.

Only 7% said inflation would stand at 1-3% this year.

Key factors behind the rise in inflation are the global oil price surge, driven by the Russia-Ukraine war, higher prices of some raw materials and global supply chain disruptions, said Montri Mahaplerkpong, vice-chairman of the FTI.

The federation earlier expressed concern over the impact of China's zero-Covid policy because the imposition of frequent lockdown periods can affect the manufacturing sector in the country, dubbed the "factory of the world".

"Most Thai businesses have to bear higher production costs, while consumer purchasing power remains weak and the economy is not healthy," he said.

The Joint Standing Committee on Commerce, Industry and Banking recently agreed to maintain its projections for GDP growth rate and other economic measurements for 2022.

The private sector kept its estimate for economic growth this year at 2.5-4%, export growth at 3-5% and inflation at 3.5-5.5%.

The FTI called on the government to launch new stimulus measures to help businesses, especially small and medium-sized enterprises.

According to the poll, 76% of the interviewees believe the global economy is at risk of facing a recession this year.

Only 24% were positive about the global economy, believing it will remain stable.

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