Economist Warns Inflation May Hurt Thailand’s Low-Income Households Most

Economists warn that low-income households will be hit much harder by inflation than high-income households after headline inflation reached its highest level in 13 years in March, adding to fears over the rising cost of living.

Thailand’s weekly economic review, released Tuesday by Krungsri Research, showed that rising inflationary pressure is straining household and business expenses, and that low-income groups are expected to face rising prices which are more than six times faster than last year. In contrast, inflation is predicted to remain largely unchanged for high-income earners this year.

The Thailand Consumer Price Index (CPI) increased 5.73 percent in March, compared to the same period of last year, and increased 0.66 percent from February 2022, resulting in an average of 4.75 percent for the first quarter of 2022, said the Ministry of Finance.

Krungsri Research expects that rising car and food prices, combined with a surge in energy prices caused by the Ukraine war, will likely keep Thai inflation above the target range until at least 4Q, when the rate may begin to soften. 

Additionally, its analysis revealed that low-income earners spend about twice as much of their income on transport and food as high-income earners due to disparities in their normal expenditure patterns.