Falling baht, oil price hike could fuel inflation

The ministry is, however, standing by its forecast that full-year inflation will not exceed 7 per cent.

Inflation in the first eight months reached 6.7 per cent.

Siripol Yodmuangcharoen, permanent secretary to the ministry, said officials were closely monitoring the baht and the oil price.

Inflation fell to 6.4 per cent last month due to lower oil prices, after having peaked to 9.2 per cent in July, a record high in a decade.

He was also concerned about whether the new government would withdraw the six measures that helped relieve the cost burden on consumers, as it could lead to higher inflation for the rest of the year.

"The government must consider carefully before cancelling the six measures, as they have been a major factor in curbing inflation," said Siripol.

He also opposed the Internal Trade Department's plan to add gold to its price-control list, as gold prices change in line the global price for the precious metal.

He said products under the ministry's price-control list must meet three criteria: they must be essential goods; their production must be based on daily use; and there must be many players in the sector.

He said gold did not meet any of the three criteria and hence it should not be under the ministry's price-control list.

To prevent consumers from unfair price hikes amid increasing demand for gold, Siripol said the ministry would call a meeting of concerned agencies on how to tackle the fluctuating price.