The Commerce Ministry has adjusted the outlook for headline inflation this year to a range of zero to 1.0%, from -0.3 to 1.7%, based on rising energy prices, depreciation of the baht and higher prices for fresh food.
Poonpong Naiyanapakorn, director-general of the Trade Policy and Strategy Office, said headline inflation in March declined by 0.47% year-on-year, attributed to lower fresh food prices, especially meat and vegetables, caused by increased supply and high base prices in March 2023.
Government measures reduced prices of electricity and diesel fuel year-on-year, while the prices of electrical appliances and cleaning products also fell, said the office.
The prices of other goods and services moved in a normal range, noted the office.
The consumer price index (CPI) in March increased by 0.03% compared with February 2024.
The average CPI for the first quarter this year decreased by 0.79% year-on-year.
Core inflation, excluding fresh food and energy, rose 0.37% year-on-year, sliding from an increase of 0.43% in February.
"Headline inflation will still be negative in April, but a much smaller decline," Mr Poonpong said.
He said inflation should accelerate in the second quarter based on higher global oil prices, a weak baht, a lower base electricity price resulting from government subsidies the previous year, particularly in May 2023, and a rebound in the tourism sector that will result in higher prices of related goods and services.
"As a result, the ministry tightened the 2024 forecast to zero to 1.0% from -0.3 to 1.7%, assuming economic growth of 2.2-3.2%, crude oil at US$80-90 per barrel, and the baht ranging from 34.50-36.50 to the US dollar," said Mr Poonpong.
Thanavath Phonvichai, president of the University of the Thai Chamber of Commerce, predicts the Thai economy will expand in the second quarter as state budget spending begins and people celebrate Songkran.
The festival is expected to create a fiscal multiplier of 200 billion baht, which should increase GDP by one percentage point, as foreign arrivals are expected to tally 2 million people in 21 days, generating revenue worth 70 billion baht, said Mr Thanavath.