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26 Apr 2023

Thai Economy

Extremely hot weather…contributes to rising household expenses (Current Issue No.3404)


        Extremely hot weather may cause household expenses in three categories to soar. First is a surge in power bills in line with increased electricity consumption among those living in urban communities. It is expected that average electricity prices of households during March - May 2023 will increase to THB 974 - 1,124 per household. The second category is higher food prices due to rising raw material costs amid the extreme heat, resulting in lower outputs released to the market. Plus, the restaurant business may bear additional costs of ice and freezers to store perishable ingredients. The third category is medical expenses for treatment of heat-related illnesses.

        KResearch projects that in 2023 average monthly household expenses in these three categories will amount to around THB 9,666 per household, compared to THB 8,868 per household in 2022, increasing by 9.0 percent YoY amid persistently high costs of living. Meanwhile, household income remains relatively stable. As a result, households must reduce their expenses in other categories such as non-food products (clothes, shoes) that are considered less necessary, in order to offset the higher expenses in the three aforementioned categories. Additionally, the government’s electricity bill subsidy scheme, to be implemented in May, may help alleviate households’ financial burdens to some extent. However, the impact of costly power bills may ease during the less hot months of the year, leading to reduced electricity charges and demand for power usage. Meanwhile, food bills, which account for a greater proportion of expenses, are expected to stay high during the remainder of the year.

        Looking ahead, global warming is likely to cause volatile weather conditions, and higher temperatures during the hot season. Meanwhile, businesses have placed greater emphasis on sustainability issues. These factors will lead to additional costs, meaning that prices of goods and services may remain high. This could result in a continual increase in household expenses. To cope with rising expenses over the long term, we should change our lifestyles to help protect the environment. At the same time, the business sector may need to improve operational efficiency to be in sync with changes in consumer behaviour focusing on sustainability as well.

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Thai Economy