Bangkok: Ekaniti Nitithanprapha, Deputy Prime Minister and Minister of Finance, has highlighted a potential surge in inflation to 4-5% due to escalating commodity and food costs, primarily driven by increased oil and fuel prices. He underscored the urgency of accelerating Thailand's energy transition, emphasizing the need for transparency and accountability to address the critical situation.
According to Thai News Agency, Ekaniti addressed concerns raised by the People's Party's petition to the Constitutional Court regarding a 200 billion baht loan for energy transition, part of a 400 billion baht loan decree. The petition questioned the urgency of the loan, but Ekaniti pointed out that the Thai economy faces a complex crisis with no foreseeable end. Rising energy costs, primarily due to Thailand's dependence on imported oil and natural gas, contribute significantly to this crisis. These issues were also discussed at ASEAN meetings, given Thailand's heavy reliance on external energy sources.
Thailand's dependency on imported energy has resulted in soaring inflation, with the latest figure at 2.9% and projected to rise further. Higher commodity costs are impacting the cost of living, particularly food prices, which have already increased by nearly 10%. The government is preparing for potential future crises in this area.
When questioned about coordination with the Bank of Thailand regarding monetary measures to control inflation, Ekaniti noted that the average annual inflation remains close to the target range of no more than 3%. However, discussions with the Bank of Thailand have taken place in a joint meeting of four economic agencies.
Ekaniti emphasized that the crisis originates from the energy sector and stressed the necessity of the emergency decree authorizing the Ministry of Finance to borrow money. This is essential to prepare for a potential escalation of the crisis, which differs from past external crises like the 1997 financial crisis. This current crisis affects the livelihood and cost of living for the population, requiring government preparation to mitigate widespread impact.
Responding to the Democrat Party's statement about Moody's praise for Thailand's economy, Ekaniti clarified that while Moody's acknowledged Thailand's strong international reserves, urgent domestic problems necessitated the borrowing to address these issues.
The government has established a framework under the "5T" strategy to efficiently utilize borrowed funds. This includes targeted relief, transitioning the energy structure, transforming the economic structure, ensuring transparency and accountability, and involving the private sector in project screening. The strategy aims to address the crisis while reducing long-term reliance on energy imports.