BANGKOK -- Thailand's consumer price index fell by 0.47% in March from the previous year, marking two straight quarters of negative headline inflation largely fueled by government subsidies on diesel and electricity that have swelled the state oil fund's deficit to 98.2 billion baht ($2.7 billion).
Inflation would rise again if the government does not renew its subsidies on fuel and electricity, or has to lower the subsidy due to fiscal constraints, said Poonpong Naiyanapakorn, director of the Ministry of Commerce's Trade Policy and Strategy Office. The government's diesel price capping scheme expired on Sunday, and the excise tax cut on diesel will expire on April 19.
