The Ministry of Commerce reports that inflation in December increased by 0.36%, marking the 18th consecutive month of positive growth. For the entire year of 2018, inflation rose by 1.07%, which is within the expected range but the highest in four years. The target for 2019 is set at 1.2%, within a range of 0.7-1.7%.


          On January 2, 2019, Ms. Pimchanok Wongsriwong, Director of the Office of Trade Policy and Strategy (OTPS), revealed that the Consumer Price Index (CPI) for December 2018 was 101.73, a decrease of 0.65% compared to November 2018, but an increase of 0.36% compared to December 2017, representing 18 consecutive months of growth. The average inflation for the entire year of 2018 increased by 1.07%, falling within the estimated range of 0.8-1.6%, and is the highest inflation rate since 2014, when it was 1.89%. In 2015, it was -0.9%, in 2016 it rose by 0.19%, and in 2017 it increased by 0.66%.

 

          The increase in inflation for 2018 by 1.07% was primarily driven by rising energy prices, which, although they began to decrease towards the end of the year, continued to impact the prices of goods and services, particularly oil prices. Agricultural product prices, which fluctuate seasonally, had both positive and negative effects on inflation. Meanwhile, the increasing domestic demand, in line with wage rates and value-added tax revenues, along with government spending stimulation measures and improved investment and exports, contributed to increased purchasing power in the country.

 

          However, the inflation outlook for 2019 is expected to be around 1.2%, within a range of 0.7-1.7%, based on assumptions of economic growth rates of 3.5-4.5%, Dubai crude oil prices of $70-80 per barrel, and an exchange rate of 32.5-33.5 baht per US dollar. Inflation in the first quarter is projected to be 0.86%, 0.98% in the second quarter, 1.27% in the third quarter, and 1.81% in the fourth quarter.

 

          Factors to watch for inflation in 2019 include the continued volatility of energy prices, which could lead to increased domestic transportation fares. Investment trends are improving, positively affecting citizens' incomes, while agricultural product prices are also improving, particularly for rice and cassava. Palm oil and coconut prices show positive signs from measures addressing issues, leading to higher incomes for farmers. Industrial product prices are expected to rise only slightly, and exports continue to improve, which is a positive factor for purchasing power, along with the exchange rate affecting the cost of imported goods and exports.

 

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