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10 Feb 2022

Thai Economy

Prices of goods continue to rise, while incomes decline – putting pressure on KR-ECI, which fell to a historic low in January 2022


  • The Omicron variant has not led to the implementation of stricter COVID-19 preventive measures and its impact on economic activity was relatively limited. However, the climbing prices of goods – especially fresh food like pork as well as energy prices which remained at high levels – put pressure on households’ purchasing power, causing the current KR-ECI to drop for the fourth consecutive month to a historic low of 30.9. Meanwhile, the 3-Month Expected KR-ECI is situated at 33.2, indicating that Thai households perceive that cost of living will continue to go up.
  • KResearch conducted an additional survey related to Thais’ opinions towards the expected duration of soaring product prices and households’ methods of coping with the issue. Findings revealed that the longer the period that some households expect the prices of goods to go up, the more likely they are to reduce unnecessary expenses. However, those who perceive the rise in product prices to be temporary (one month for instance) are more inclined to use their personal savings to cope with the rising expenses. The higher goods prices have affected purchasing power at present as reflected in the use of personal savings, and are expected to trigger cuts in expenses that are deemed unnecessary in the forthcoming period.
  • Product prices will tend to remain high for the upcoming period, or at least until the end of 1Q22. This is mainly attributed to an uptick in energy prices, which indirectly affect goods prices via rising transportation and production costs, while also directly affecting households via increased passenger fares and prices of energy-related products. Since economic activities have yet to return to pre-COVID-19 levels, the Thai government’s relief measures and schemes to ease households’ burdens will remain essential amid highly fragile economic conditions and households livelihoods.

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Thai Economy