Headline inflation rose by 0.84% year-on-year in March, marking the twelfth consecutive monthly increase, as reported by the Commerce Ministry.
This uptick was primarily driven by higher prices for non-alcoholic beverages, meat, and ready-to-eat meals, along with increases in diesel fuel and housing rental costs. The impact of other goods and services on inflation was minimal.
Poonpong Naiyanapakorn, director-general of the Trade Policy and Strategy Office (TPSO), stated that the consumer price index for March was 100.35.
He indicated that the headline inflation rate for the second quarter is expected to decline from the first quarter. The average inflation rate for the first quarter stood at 1.08%, while the second quarter is projected to be between 0.14% and 0.15%.
Factors contributing to this anticipated decline include the government’s ongoing measures to alleviate the cost of living, a high base price for fresh vegetables and eggs from the previous year, and more favorable weather conditions that enhance agricultural output.
Additionally, lower Dubai crude oil prices have led to a corresponding drop in domestic gasohol prices, according to the TPSO.
Major businesses have also been engaging in marketing initiatives that complement the government’s economic stimulus efforts.
Despite these factors, certain elements continue to exert upward pressure on inflation, particularly the high costs of raw agricultural materials such as coconut, coffee, and palm oil, which in turn raise the prices of finished products like coconut milk, coffee, and vegetable oil.
Ready-to-eat meals remain expensive due to increasing raw material costs, he noted.
Mr. Poonpong mentioned that new tariff measures from the US could have implications for various products. Initially, imports from the US, including oil and other goods, may be affected as part of ongoing negotiations.
However, he pointed out that the new tariffs are not expected to impact the service sector, including electricity, water bills, and educational services.
He confirmed that the annual inflation target will be revised and announced by early May after considering the effects of the US tariffs.
The office also evaluated the influence of the recent earthquake on inflation, analyzing 464 goods and services, with findings indicating that 95% remained unaffected, including ready-to-eat meals, bottled water, personal care items, and medicines.
Only 2% of the items studied saw price increases, primarily due to higher demand for construction-related services and materials, such as labor, cement, bricks, floor tiles, and paint.
Conversely, 3% of items experienced price reductions, notably condo rental prices, airfares, accommodation, hotel rates, and tourism-related costs. These decreases reflect public concerns and a slowdown in tourist activity following the earthquake, according to Mr. Poonpong.
