Krungthai COMPASS revealed that headline inflation in November slowed down to 5.55% (YoY) due to a slowdown in fresh food inflation, both vegetable and fruit prices, which declined in line with more output coming to the market after the situation. the flood subsides While inflation in the energy category increased slightly. Core inflation was at 3.22% (YoY), a slight increase from the previous month as prices of processed food and non-food prices gradually increased.
Keep an eye on basic product prices and electricity bills that may tend to increase. Core inflation in November continued to increase due to the gradual increase in prices of operators. In addition, electricity costs in January-April 2023 may be raised to 5.37 baht/unit (from 4.72 baht /unit) in line with higher production costs. Krungthai COMPASS expects that electricity costs that are likely to increase by about 13.8% will increase inflation by about 0.5%, which may exacerbate the business sector’s increase in price transmission in the future. Conditions in which all-round costs remain high
Headline inflation in November slowed to 5.55% due to lower raw food prices after the flood situation subsided.
Headline inflation in November was 5.55% (YoY), decelerating from 5.98% (YoY) in the previous month, below analysts’ expectations of 5.9%1 as fresh food prices dropped to 8.08%. (YoY) compared to 10.48% (YoY) in October due to a significant drop in fruit and vegetable prices. following the increase in output to the market after the flood situation subsides However, energy prices were slightly higher at 13.09% (YoY) compared to 13.07% (YoY) in October following higher fuel prices.
for core inflation Food prices (excluding fresh food and energy) rose slightly at 3.22% (YoY) from 3.17% (YoY) in the previous month due to the gradual increase in the price of processed food and non-food prices. Except for condiment prices that slowed down following the decline in vegetable oil prices, the average headline inflation for the first 11 months of the year was 6.10%, while the core inflation was 2.44%.
Although headline inflation slowed down, prices of goods in the basic category had to be kept an eye on, which could gradually increase continuously. Inflation in November slowed down from fresh food prices, both vegetables and fruits, after the flooding problem subsided. In addition, the effect of the base in the previous year began to increase. But if considering the core inflation rate, it was found that prices rose by 0.13% (MoM) from the previous month, accelerating compared to 0.05% (MoM) in October due to the gradual increase in food prices, including ready-to-eat food and beverage prices. non-alcoholic beverages and non-food categories such as clothing and footwear Treatment category and personal service from the price of personal items. and public fares, etc., reflecting the cost pass-through from operators, which resulted in product prices continuing to increase continuously in line with the high cost situation.
keep an eye on electricity costs that may tend to increase This will affect inflation in 2023 as the cost of electricity production may increase in line with the cost of importing liquefied natural gas (LNG) from the world market to replace natural gas in the Gulf of Thailand and from Myanmar. which has more expensive import costs affecting the cost of electricity generation that increases As a result, the electricity bill for the period of January – April 2023 may increase to 5.37 baht / unit from the current level of 4.72 baht / unit (electricity cost for the period of September – December 2022). An increase of about 13.8% since January 2023 will affect inflation by about 0.5%. In addition, rising electricity costs may aggravate the business sector to increase the price pass-through in conditions where all-round costs remain. high level
analyst
Chonnithis Chaisingthong
Krungthai COMPASS
