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Thailand’s Finance Ministry said on Wednesday that a spike in global energy prices could lead the country’s headline inflation to grow up to 7 per cent in 2022, the highest level since the 1997-98 Asian financial crisis.
Arkhom Termpittayapaisith, the Finance Minister, predicted that headline inflation will rise in tandem with a surge in crude oil prices as a result of sanctions against Russia for its invasion of Ukraine.
He expects headline inflation to rise by 5 to 7 percent if crude oil prices remain above $100 per barrel for the rest of the year.
The worst case scenario is that the average oil prices hit US$150 per barrel, which will prompt the consumer price index (CPI) to rise by 7 per cent, a level not seen in 23 years.
Thailand’s headline inflation hit a rise of 7.89 per cent in 1998 in the wake of the 1997-98 Asian financial crisis.
In February, Thailand reported a 5.8-per-cent year-on-year rise in CPI, the highest in 13 years, driven by rising energy and food prices.
The Thai cabinet this week approved a set of relief packages including subsidies on fuel for state welfare card holders and motorcycle taxi drivers to tackle the impact from surging energy costs.
The packages also include the capping of diesel prices until the end of April, as well as a cut in some electricity bills between May and August.