Posted on 05 Jan 2010
The country's consumer price index, which tracks 417 products and services, rose in December for the third month running, signalling the country's return to "normal growth" in inflation, said commerce permanent secretary Yanyong Phuangrach.
Consumer prices rose by 3.5% year-on-year in December driven by food and beverages, health-care services, transport, and utilities, after a 1.9% increase in November and a 0.4% gain in October.
"The rise in inflation from October to December showed that fourth-quarter data will return to normal growth," he said, attributing the rise partly to a hike in oil prices in the second half of 2009. It also reassures manufacturers, leading to lower unemployment, he said.
The inflation projection is based on oil prices staying between US$70 and $80 per barrel, foreign exchange ranging between 31 and 33 baht per dollar, and continued subsidies for electricity, water, cooking oil, transport, and education for low-income earners.
The core consumer price index, which excludes volatile energy and food costs, rose by 0.2% in December from a year earlier. Core inflation rose by 0.3% in 2009 over a year earlier.
The Bank of Thailand estimates that the country's inflation rate could pick up in the first six months of the year due largely to the state subsidy plans and rising oil prices.
"Last year's inflation was within the Monetary Policy Committee's projection even though it was above target at some points due to government measures to ease people's spending," said central bank deputy governor Atchana Waiquamdee.
The central bank did not expect the government to extend its economic relief measures but their impact should only be short-term, she said.
The BoT said this year's headline inflation should increase by 3% to 5%.
Ms Atchana said inflationary pressure this year would depend on the domestic and global economic conditions together with spending and consumption figures.
Fuel demands would increase as the global economy continued to recover. The BoT expects the average oil price in
"Pump prices will certainly fluctuate this year ... However, inflation should stay within the target," she said.
