The Federation of Thai Industries (FTI) has suggested that a recent decision to hike electricity prices by 20% in early 2023 will push up inflation and undermine Thailand’s competitiveness just as the economy has started to gradually recover from the pandemic.
Citing higher fuel costs, the Energy Regulatory Commission said the power tariff for businesses will increase by 20.5% to 5.69 baht ($0.1640) per unit from January to April, with that of households remaining at 4.72 baht.
The FTI, which includes representatives from industry, banking and commerce, urged the government to delay the price hike as manufacturers would be forced to increase the price of goods.
FTI Vice Chairman Isares Ratanadilok Na Phuket said, “The hike will have a severe impact on people’s costs of living and the cost of the manufacturing and service sectors still in recovery.”
Roongrote Rangsiyopash, President of industrial conglomerate SCG, meanwhile said the move will reduce Thailand’s competitiveness and attractiveness as power costs for businesses will be 50-120% higher than those in countries like Vietnam and Indonesia.
Surong Bulakul, Vice Chairman of the Thai Chamber of Commerce, said higher power prices could increase inflation to 3.5% next year, from 3% currently forecast, with interest rates on the rise.
The Bank of Thailand (BOT) said it would continue to raise rates for a while to help the economy and curb inflation. (NNT)