BANGKOK, Dec 23 (Reuters) – Thailand’s decision to raise electricity prices by 20 percent in early 2023 will drive up inflation and weaken the country’s competitiveness as the economy struggles, a leading conglomerate said on Friday. Gradually recovering from the pandemic.
The recovery in Southeast Asia’s second-largest economy has lagged other economies in the region as the vital tourism industry has only started to rebound this year.
The Energy Regulatory Commission said earlier that electricity prices for businesses will rise 20.5 percent to 5.69 baht ($0.1640) per unit from January to April, while household rates will remain at 4.72 baht due to higher fuel costs.
The business group, which includes representatives from industry, banks and commerce, urged the government to hold off on price hikes because manufacturers would be forced to raise prices for their goods.
“The rate hike will have a severe impact on people’s living costs and the cost of manufacturing and services, which are still recovering,” said Isares Ratanadilok Na Phuket, vice-chairman of the Federation of Thai Industries.
Industrial Group SCG
Surong Bulakul, vice chairman of the Thai Chamber of Commerce, said higher electricity prices could lift inflation to 3.5 percent next year from the current forecast of 3 percent, as interest rates rise.
On Monday, the central bank said it would keep raising interest rates for some time to help the economy and curb inflation.
($1 = 34.70 THB)
Reporting by Orathai Sriring and Kitiphong Thaichareon Editing by Kanupriya Kapoor
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