May saw a fifth consecutive month of declining Thailand’s inflation rate due to decreasing fuel and energy costs. However, experts cautioned that the impending drought season and a potential hike in the minimum wage could cause inflation to spike again.
According to Wichanun Niwatjinda, the Trade Policy and Strategy Office’s deputy director, the nation’s inflation rate dropped to 0.53% in May, the lowest level in 21 months. Despite rises in the cost of vegetables and eggs due to decreased output, prices for non-food and non-drink items decreased by 1.83%. Meanwhile, rising production costs have driven up the cost of processed food.
Despite the low rate of inflation, the deputy director cautioned that a number of factors, including the impending drought season, which would hamper production, and the proposed hike in the minimum wage, which will have an impact on production costs, might lead to higher inflation in the months to come.
In the meantime, the Thai National Shippers’ Council announced that industrial exports, including those of electronics and appliances to China and the US, fell 7.6% in April compared to the same month last year. It predicted that export growth would slow by 1% annually in 2023 and urged the new administration to encourage greater exports while being careful not to endanger small and medium-sized businesses while changing policy rates.
The decline in oil prices on the international market is one of the primary causes of Thailand’s declining inflation rate. The surplus of oil from major suppliers like Saudi Arabia and Russia as well as the sluggish demand brought on by the COVID-19 epidemic and its effects on the economy have an impact on oil prices.
Compared to other nations
In comparison to other nations in Southeast Asia and the rest of the world, Thailand’s inflation rate is quite low. Only Brunei Darussalam (0.2%) and Singapore (0.6%) were higher than Thailand’s 1.4% average annual inflation rate from 2016 to 2020, which placed it 13th out of 15 Southeast Asian nations. Myanmar (6.8%) has the highest inflation rate in the region, followed by Laos (5.4%) and Vietnam (3.6%). 2.7% was the area average.
In terms of average annual inflation from 2016 to 2020, Thailand was rated 136th out of 196 nations, lower than the global average of 3.1% (1.4%). Venezuela (1,698.9%) has the highest inflation rate in the world, followed by Zimbabwe (175.6%) and Sudan (54.3%). Following Burundi (-3.9%) and Ecuador (-1.2%), Libya (-8.7%) had the lowest inflation rate.
