After a slow but steady recovery from the epidemic, the Federation of Thai Industries (FTI) has voiced concern that a recent proposal to raise power costs by 20% in early 2023 may spur inflation and damage Thailand’s competitiveness.
Businesses will pay 5.69 baht ($0.1640) per unit of electricity from January through April, an increase of 20.5%, according to the Energy Regulatory Commission, which cited rising fuel prices. The residential rate will stay at 4.72 baht.
The FTI, which is made up of businesspeople, bankers, and economists, lobbied the government to postpone the price rise since it would cause manufacturers to raise their prices.
“The raise would have a serious impact on people’s prices of living and the cost of the industrial and service sectors still in recovery,” said Isares Ratanadilok Na Phuket, vice chairman of FTI.
Meanwhile, President of industrial conglomerate SCG Roongrote Rangsiyopash claimed the decision would impair Thailand’s competitiveness and attractiveness since electricity bills for enterprises would be 50-120% more than in countries like Vietnam and Indonesia.
The Vice Chairman of the Thai Chamber of Commerce, Surong Bulakul, recently predicted that rising interest rates and the cost of electricity might push inflation up to 3.5% in 2023 from the current projection of 3%.
In an effort to strengthen the economy and reduce inflation, the Bank of Thailand (BOT) has said that it will maintain its recent rate increases for the foreseeable future.
The FTI warned last week that if the government increased the commercial power rate, its members would have to boost product prices by 5 to 12 percent.