The consumer price index (CPI), a gauge of headline inflation, rose for a second straight month in October, driven by soaring prices of gasoline and some raw food, especially fresh vegetables, which were affected by floods in several areas.
The prices of food items at home and away from home, seasonings and condiments also increased thanks to higher material costs.
The Commerce Ministry reported yesterday that the headline inflation rose by 2.38% year-on-year in October from a 1.68% increase in September after contractions of 0.02% in August, 0.45% in July, 1.25% in June, 2.44% in May and 3.41% in April.
On a monthly basis, the CPI rose by 0.74% from September.
Core CPI, which excludes raw food and energy prices, rose 0.21% year-on-year in October but was unchanged from September.
For the first 10 months this year, average headline inflation was 0.99% year-on-year and core inflation 0.23%.
Ronnarong Phoolpipat, director-general of the Trade Policy and Strategy Office, said the increase in October's inflation stemmed not only from increasing energy prices but also the positive impact of the easing of restriction measures to stem Covid-19 and the state's stimulus packages which helped boost the purchasing power of businesses and individual consumers.
Higher inflation also came in accordance with relevant key economic indicators which expanded compared to the same period last year in both demand and supply.
Value-added tax revenue on imports and value of exports, for instance, had continuously expanded.
However, he noted agricultural products have seen prices decline and the adverse effect of flooding which caused the first reduction in income for farmers in 15 months. This may subsequently result in changes in demand and inflation in the country that must be closely monitored, he said.
Mr Ronnarong said the CPI is likely to rise further in November mainly thanks to the relief of the Covid-19 situation in many areas, more distribution of vaccines and the easing of the government's lockdown measures.
The country's reopening for fully vaccinated foreign tourists from Nov 1 is also a significant factor.
Other factors are rising prices of energy which may affect costs of production and services, as well as logistics while flooding in many areas has adversely affected quantities of agricultural products, causing changes in their prices.
"The inflation prospects are expected to continue rising in the remaining two months of the year, but the rise is unlikely to be on par with October's rate," said Mr Ronnarong. "Prices of fresh vegetables are expected to drop soon from higher production in the winter season."
The Commerce Ministry projected the annual headline inflation in 2021 to grow at the rate between 0.8 to 1.2% (with an average of 1%) which is described as an appropriate range that would effectively support the current economy.