Posted on 05 Jan 2015
Costs of consumer products are forecast to remain stable in 2015, as manufacturers are unlikely to raise their prices much with the economy and consumers' purchasing power still weak.
Boonyarit Kalayanamit, director-general of the Internal Trade Department, said its focus this year would be on the agricultural sector, which experienced price volatility throughout 2014 because of the slow global economy.
The government will consider early this year if it needs to review the product price structure as oil prices continue to fall.
Local manufacturers have been asked for cooperation to cap the prices of their products from mid last year until the first quarter of this year to help ease people's cost of living.
The Internal Trade Department had been tasked to study and closely monitor the consumer product price structure to ascertain if it was imperative to lower prices in the wake of falling global and domestic oil prices.
Oil prices generally account for 40% of the production costs of consumer products.
According to Mr Boonyarit, authorities will also closely monitor the impact of the baht depreciation, saying weaker baht may be a boon to exporters, but it also makes imported capital goods and raw materials more expensive.
The Commerce Ministry will hold a meeting this month with manufacturers to review the product price structure, focusing mainly on items that benefit from benign transport costs due to falling oil
prices such as cement, steel rods and construction materials and items related to agricultural production such as imported fertiliser.
The Commerce Ministry projected inflation of 1.8% to 2.5% in 2015 compared with an estimated 2% to 2.8% in 2014.
For the first 11 months, inflation rose by 2.02% year-on-year, with core inflation up 1.57% and within the Bank of Thailand's target range of 0.5% to 3%. Consumer prices had risen at a slower rate due to falling retail fuel prices, in line with declines in the global crude oil price.
Somchai Pornrattanacharoen, president of the Thai Retailers and Wholesalers Association, said falling oil prices would prompt manufacturers to put off raising prices until this year's first quarter.
However, he said the likelihood of manufacturers and retailers increasing prices any time soon was slim, as consumers' purchasing power remained weak given the gloomy economic prospects and bearish farm prices.
