Thailand August consumer prices up 1.1 pct on yr; lowest rise in nearly 5 yrs
BANGKOK (Thomson Financial) - Consumer prices in Thailand last month rose just 1.1 percent from a year ago, the lowest gain in nearly five years, the Commerce Ministry said Monday.
It attributed the modest rise to weaker fuel prices, with the cost of oil down 5.2 percent. Overall energy costs were down 4.5 percent,
In July consumer prices rose an annual 1.7 percent.
'Manufacturers have not raised prices for goods amid an economic slowdown,' Karun Kittisathaporn, the ministry's permanent secretary, told reporters.
The ministry will keep its consumer inflation forecast unchanged at 1.5 to 2.5 percent in 2007, Karun said.
The August figure came as a surprise to economists who had expected inflation to edge up to 1.8 percent due to rising food prices.
Vegetable prices in August jumped 23.5 percent with rice prices up 8.9 percent, the ministry said.
Core inflation, which excludes volatile food and energy prices, rose just 0.7 percent from a year ago.
With inflation staying low, Pimonwan Mahujchariyavong, an economist at private think tank Kasikorn Research Centre, said the central bank should cut its key interest rate to spur the country's slowing economy.
'It's time for the Bank of Thailand to rethink its interest rate policy to boost economic development,' she said.
The Thai central bank last month left its key interest rate unchanged at 3.25 percent, amid easing inflation despite calls from the business sector for a rate cut to help shore up the economy.
Thailand's economy is expected to grow at just over four percent in 2007, which would be one of the lowest projected rates for Southeast Asia.
Forbes Sept 3, 2007