Customers crowd around a vegetarian food shop at Klong Toey market. Commerce officials expect higher produce prices as the annual vegetarian festival and flooding dent supply. PATIPAT JANTHONG
Consumer prices rose for the sixth straight month in September, driven by higher costs for fresh foods after floods hit certain areas of the country.
The Commerce Ministry said yesterday that the consumer price index, based on 450 products and services, edged up 0.38% year-on-year last month after increases of 0.29% in August, 1% in July, 0.38% in June and 0.46% in May.
Pimchanok Wonkorporn, deputy director-general of the Trade Policy and Strategy Bureau, said tobacco and alcoholic beverage costs also pushed up prices in September.
Cigarette prices, notably, rose by 28.2% year-on-year thanks to an excise tax hike approved by the cabinet on Feb 9.
On a monthly basis, prices edged up 0.04% from August, mainly because of higher transport and communication prices, which rose in line with higher retail fuel prices.
Core inflation, which excludes food and energy prices, edged up 0.75% on an annual basis in September and 0.02% on a month-to-month basis.
Headline inflation for the first nine months was 0.02% -- the first positive reading in 21 months -- while core inflation was 0.74%.
Of the 450 items tracked, 139 saw price increases, including eggs, soy sauce, garlic, limes, cooking oil and fuel oil. Some 112 items saw price decreases, while the prices of 199 items stayed the same.
"Higher core inflation in the first nine months shows that consumers still have higher purchasing power and the country's economy is on course of gradual growth," said Ms Pimchanok.
"The ministry is still maintaining its 2016 inflation forecast of 0-1% based on expected economic growth of 2.8-3.8%, assuming Dubai crude oil prices of US$35-45 a barrel and a foreign exchange rate of 35-37 baht to the US dollar."
He added that global oil prices are expected to rise in the final quarter of the year in line with higher demand in winter.
The latest move by Opec to cut oil production is likely to raise oil prices to some extent.
Ms Pimchanok also warned that prices of construction materials such as cement and steel may be subject to increases in light of higher demand to serve the government's massive investments in infrastructure.
Thanavath Phonvichai, vice-president for research at the University of the Thai Chamber of Commerce, said the higher core inflation reflected Thailand's mild economic recovery and rallying purchasing power.
But he said the increase remained benign and is not large enough to put pressure on the Bank of Thailand to hike its policy rate in the foreseeable future.
For the final quarter, no great factors have been registered that would sharply push up the inflation rate, added Mr Thanavath.
The university expects inflation for the entire year to rise by 0.4% year-on-year.
In a related development, the ministry is preparing to cut the number of product items and increase the number of services items used to calculate inflation to reflect international standards.
From the ministry's preliminary study, the number of product and service items should be reduced to 100 items.
But Ms Pimchanok said the ministry must consult the Bank of Thailand and related state agencies such as the National Statistical Office so as not to reduce people's trust in the consumer price index.
The revised consumer price index is expected to become available in December or early next year.
Meanwhile, the Bank of Thailand reported in its business sentiment index (BSI) yesterday that business confidence improved in September, reversing two straight months of decline, to above the 50-point threshold that separates pessimism from optimism.
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