Fuel, vegetable prices push up inflation
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Fuel, vegetable prices push up inflation

The consumer price index (CPI) rose for a sixth consecutive month in September, up by 0.61% year-on-year, driven by higher prices of diesel and some vegetables.

Poonpong Naiyanapakorn, director-general of the Trade Policy and Strategy Office (TPSO), said headline inflation rose 0.61% in September from a year earlier after August's annual increase of 0.35%.

He said the rise was mainly based on higher diesel fuel prices and a surge in food prices, especially fresh vegetables, fresh fruit, rice and glutinous rice, due to flooding in agricultural areas. However, the prices of gasohol and gasoline have fallen in line with global oil prices.

As for other goods and services, their prices moved in a normal direction, said Mr Poonpong.

The CPI in September compared with August fell by 0.1% month-on-month, largely attributed to a 0.36% decrease in the non-food and beverages category.

The average CPI over the past nine months rose by 0.2% year-on-year.

Core inflation (excluding fresh food and energy) increased by 0.77% year-on-year, with the figure for the first nine months of the year averaging 0.48%.

As for October, the TPSO predicts headline inflation will increase due to three key factors.

First, the price ceiling of diesel at 33 baht per litre is higher than the same period last year due to the termination of the government's support measures for fuel.

Second, the impact of flooding has caused the prices of fresh vegetables and fruit to rise as some agricultural areas have suffered damage.

However, this is expected to be a short-term effect.

Third, the prices of goods and services related to tourism have also risen, especially airfares, which align with the high tourism season.

Mr Poonpong said headline inflation is expected to be 1.25% in October and about 1.49% in the final quarter of 2024.

However, Mr Poonpong said some factors could temper inflation, such as the appreciation of the baht which has lowered import costs, particularly fuel, and intense competition among large-scale wholesale and retail traders in organising marketing promotions following the government's implementation of the first round of economic stimulus measures.

Furthermore, the global crude oil price is lower than last year.

The current average price is approximately US$70 per barrel, compared to $80 in 2023.

Regarding the 10,000-baht cash handout, one of the government's stimulus measures, it was found that sales of food and daily necessities increased while the price of products remained unchanged.

This showed that the 10,000-baht cash handout has increased consumer purchasing power, particularly for the vulnerable segments of the population.

The Commerce Ministry revised its forecast of headline inflation for the full year to between 0.2-0.8%, from between zero and 1% under the assumption of economic growth of 2.3-2.8%, a crude oil price of $75-85 per barrel, and the depreciation of the baht in a range of 34.5-35.5 to the dollar.

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