Thailand’s inflation rises to 2.1 percent in September

BANGKOK (ThomsonFinancial) – Thailand’s inflation rate rose 2.1 percent in September from the year earlier, pushed up by a spike in food prices and rising fuel costs, the Commerce Ministry said Monday.

The September figure was higher than the market’s forecast of 1.8 percent as vegetable prices jumped 20 percent and oil prices grew 6.9 percent in the month, the ministry said.

It was a sharp rise from August when inflation eased to 1.1 percent year-on-year, the lowest in nearly five years, but the ministry said it would keep its inflation forecast unchanged at 1.5 to 2.5 percent in 2007.

‘Even oil prices rose sharply, the inflation level remained in line with our projection for the whole year,’ Siriphol Yodmuangcharoen, the ministry’s permanent secretary general, told reporters.

Energy costs rose 3.6 percent year-on-year in September while rice prices increased 8.2 percent, the ministry said.

Core inflation, which excludes volatile food and energy prices, edged up 0.8 percent.

Charl Kengchon, a senior economist at private think tank Kasikorn Research Centre, said a spike in inflation would likely prompt the Bank of Thailand to leave its key interest rate unchanged at its policy meeting on October 10.

‘As current high oil prices are to become more volatile in the winter, the central bank may decide to keep the interest rate unchanged for the time being,’ Charl said.

The central bank maintained its key interest rate at 3.25 percent in August despite calls from local business leaders for a rate cut in a bid to spur a slowing economy.

Thailand’s economy is expected to grow just over four percent in 2007, ranking among the lowest in Southeast Asia.

afp/cl

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