Scorching electricity costs may sear the economic recovery with a new threat to reduced inflation

[webfact]

A report this week from the Kasikorn Research Centre, the research arm of Kasikorn Bank, warned that rising electricity costs in the tourism and manufacturing sectors could impact the country’s competitiveness and its efforts to keep inflation at bay.

 

by Joseph O' Connor

Thailand’s inflation rate fell to 2.67% in April from 2.8% in March and is within the Bank of Thailand’s targeted range but the continued high cost of electricity, which has risen dramatically, could be only starting to feed into higher prices. The Ministry of Commerce in early April, projected that inflation will, however, continue to decline within a range of 1.7% to 2.7%.

An Economic research house is warning that the reduced level of inflation seen so far this year in Thailand may be impacted by the surge in electricity costs which is also driving up costs within the foreign tourism industry and eating into its viability. This year, Thailand saw record electricity prices, something that may be seen as a key factor in the General Election result, driven by a rise in charges and record high temperatures which may continue for another month because of the Pacific El Nino effect.

 

The economy is likely to be hit by rising prices driven by markedly higher electricity costs in 2023 according to Kasikorn Research Centre, the research arm of Kasikorn Bank.

 

Full story: https://www.thaiexaminer.com/thai-news-foreigners/2023/05/14/scorching-electricity-costs-sear-economy-hotel-restaurants-tourism-price-pressure/

 

-- © Copyright Thai Examiner 2023-05-15

 

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[bluejets]

Thailand would do well to look at the mayhem with electricity in Australia (due mostly to the greenies) both cost and possible shortage of future supply.

[hotchilli]

3 hours ago, webfact said:

The Ministry of Commerce in early April, projected that inflation will, however, continue to decline within a range of 1.7% to 2.7%.

With the cost of electricity affecting almost every manufacturing facility, food producing or handling establishment I don't see inflation dropping any time soon. It will eventually rise again as costs are put back onto the consumer.