Thailand’s inflation will fall next year, officials say
Prices are going down and Thailand’s economy is looking up. The Ministry of Commerce is forecasting that inflation in the Kingdom, which hit a 24-year high last year, will fall to just 2 to 3 percent in 2023 as most prices have stabilized and others continue to decline.
In the wake of the pandemic, inflation has been a problem for many economies around the world. Analysts has cited two main factors for higher-than-normal inflation: The COVID-19 virus and measures to prevent its spread caused supply chain disruptions and governments spent larger amounts than usual to assist businesses and populations suffering from the economic fallout.
Prior to the pandemic, Thailand’s inflation rate was in the neighborhood of 1 percent a year or less. Price stability was one of the strengths of the Thai economy, appreciated by both investors and consumers. Most analysts expect that the Kingdom’s inflation rates will eventually return to that level.
For 2022, the Ministry of Commerce reported that headline inflation, gauged by the consumer price index, rose by 6.08 percent, which was close to its projection of between 5.5 percent to 6.5 percent, with an average of 6 percent.
Energy prices were the biggest driver of rising prices, attributed to shortened global supplies caused by the conflict in Europe. As the situation has shown no signs of concluding soon, energy prices are likely to keep overall inflation higher than normal this year.
Other factors that led to rising prices in 2022 were an increase in the minimum wage and the depreciation of the baht, Thailand’s currency, in global markets. The baht is expected to regain much of its previous strength this year.