Posted on 04 Aug 2008
Fuel prices rose 46.9% year-on-year in July, leading prices
of non-food goods to climb 7.6%.
The food sector increased 11.8%, led by rice, flour and
cereal products, which rose 33.5%. Meat prices were up 19.2% and seasonings and
condiments rose 16.3%.
''The main driver of rising inflation in July was oil prices
despite the prices dropping by the middle of the month in line with world
prices,'' said Pairoa Sudsawarng, deputy secretary of the Commerce Ministry.
''If oil prices in the second half of this year are around
120 to 130 dollars per barrel, this year's average inflation may exceed 7.7%.''
Average retail fuel prices rose to 38.70 baht per litre in
July compared with 27.76 baht in the same month last year. Core inflation,
which excludes energy and food prices, rose 3.7% year-on-year in July against
3.6% in June due to finished food, construction materials and public transport
services.
On a monthly basis, consumer prices rose 0.3%, with the food
index increasing 0.3% primarily because of an increase in prices of fresh
fruits, fish and other seafoods.
Non-food prices increased a mere 0.4% in July from 1.9% in
June, as domestic petrol prices dropped at mid-month and excise tax cuts for
petrol as part of the government's anti-inflation programme started on July 25.
Core inflation in July was 0.2% month-on-month.
According to Mrs Pairoa, inflation for the year to date rose
6.6% against 6.3% in June mainly due to a rise in oil prices, with the food
index increasing 9.3% and non-food up 5.1%.
The inflation rate in the remaining five months should drop
given the government's six-pronged anti-inflation package that took effect
yesterday, said Mrs Pairoa.
She said plans were also afoot for the ministry to delay any
price increase for key items as a way to temper the cost of living.
Despite inflationary pressure, the official said the
ministry still maintained an inflation target for this year in the range of 5%
to 5.5% on the assumption that the prices of crude oil would average US$105 per
barrel.
Average prices of crude oil for the first seven months were
$107.92. Prices as of July 30 stood at $119.64 per barrel.
''The inflation rate is not that worrisome, as the world's
oil prices should drop in the remaining months, while there is increasing use
of oil substitutes such as LPG (liquefied petroleum gas), NGV (natural gas for
vehicles) and gasohol.''
Amara Sriphayak, a senior director of the Bank of Thailand,
said July's inflation wasn't too high, given the fact that it rose from a
relatively low base in the same period last year.
She added a continued drop of oil prices also helped ease
the inflationary pressure.
''It would be good if world oil prices were to stand at the
current level,'' she said. On Monday, the central bank said it expected
inflation across the year to average 7.5% to 8.8% _ up from previous estimates
of 4.0% to 5.0%.
Nipon Poapongsakorn, an economist at
