Inflation won't rise above 2.5%
The Commerce Ministry is standing by its forecast that Thailand's inflation rate will not exceed 2.5 per cent this year despite an increase in the rate last month.
The inflation rate rose to 2 per cent last month, 0.7 per cent higher than in February and the first increase after four months of successive decreases. The increase reflected a surge in oil prices. However, it was lower than the rate of 5.7 per cent in March 2006. Nateetip Tongkoa-on, director of the ministry's Trade and Economic Index Bureau, said although world oil prices were likely to increase over those of last month, the baht's appreciation was helping curb total inflation. "The ministry is confident the Consumer Price Index is under control, even if oil prices increase and the Bank of Thailand (BOT) decreases its policy interest rate to stimulate spending," she said. The next meeting of the BOT's Monetary Policy Committee, which will consider further interest-rate cuts, will be on April 11. The ministry has estimated that oil prices this year will be US$55 to $60 (Bt1.926 to Bt2,101) per barrel. The average price in the first quarter was $55.50 a barrel, and petrol was Bt24.95 a litre on the domestic market, while the average exchange rate was Bt35 to the US dollar. Factors that caused last month's increase included rising prices for both oil and food, particularly fresh food. Prices for food and beverages rose 0.7 per cent last month, with the price of pork rising 2.6 per cent. Pig farmers, afraid the price would fall, killed large numbers of their animals. Prices for goods in the non-food and beverage categories increased 0.7 per cent from February, mainly as a consequence of a 5.2-per-cent increase in fuel costs. The inflation rate in the first quarter grew to 2.4 per cent. The main factors contributing to the slight growth were a 5.1-per cent increase in food and beverages and an increase in the costs of transportation and electricity. Meanwhile, the core inflation rate increased by 1.3 per cent year on year last month, an increase of 0.1 per cent from February. Core inflation in the first quarter was 1.4 per cent. To modernise the structure of its inflation-rate calculations, the ministry is planning to take into account fares for both the Skytrain and the subway.
Petchanet Pratruangkrai The Nation
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