The Commerce Ministry is standing by its forecast that inflation will not exceed 4.5 per cent this year after the rate eased to 5.9 per cent last month.

Caretaker commerce minister Somkid Jatusripitak yesterday told a press conference yesterday that the consumer price index (CPI) tends to be more restrained in the second half.

He said his main concern was the rising price of oil - the main inflation trigger.

Inflation in May shot up to 6.2 per cent, a seven-month high.

The ministry has said it will try to curb inflation by launching fairs offering low-cost consumer goods nationwide and closely monitoring any price increases of consumer goods.

The inflation rate last month was 5.9 per cent, reflecting the surge in oil prices.

Inflation in the first half was 5.9 per cent as well.

Oil prices averaged US$61.26 (Bt2,333) per barrel in the first half and the domestic price of petrol averaged Bt26.80 per litre.

The average exchange rate was Bt38.67 to the US dollar.

"The ministry will continue to control the prices of consumer goods to curb inflation and we are confident the annual rate will decline gradually this year," said Karun Kittisataporn, the Commerce Ministry's permanent secretary.

He said that for the rest of the year inflation should not exceed 6 per cent because domestic oil prices were allowed to rise freely from July last year, and this will be reflected in the year-on-year figures for the second half.

Inflation in the first half was based on comparative figures that included subsidised oil prices.

Seasonal prices of fruits and vegetables are also set to decline in the second half, Karun added.

Prices of food and beverages dropped 1.1 per cent last month, with the price of vegetables dropping 13.7 per cent from May.

Excluding food and beverages, prices increased 0.5 per cent from May to last month.

The main factors contributing to the high inflation rate were a 2.4-per-cent increase in the price of oil, an increase in the cost of domestic air tickets and rising electricity prices.

Meanwhile, core inflation increased 2.7 per cent year on year last month, an increase of 0.1 per cent from May.

Core inflation in the first six months was 2.7 per cent compared to the first half of last year.

Despite signs that inflation is decreasing, Somkid is planning a new healthcare project for low-income people.

The project will help those in low-income brackets find treatment for basic health complaints within or close to their communities. He has ordered the Internal Trade Department to work with hospitals and the Medical Council of Thailand to find volunteer doctors and nurses for the programme.

He said the project will require a high level of support from the Medical Council.

The department also intends to increase the number of mobile food kiosks nationwide, particularly at factories and in government offices, in order to help reduce the high cost of living for those with low incomes.

Petchanet Pratruangkrai

The Nation