Thai inflation rises 4% in July: Commerce Ministry

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BANGKOK, Aug 1 – Thailand’s Consumer Price Index (CPI) in July edged up to 112.74, an increase of 4.08 per cent year-on-year, owing to price hikes for varied products, Permanent Secretary for Commerce Yanyong Phuangrach announced on Monday.

The July rise was attributed to higher prices of core food commodities rice and pork as well as the rising costs of electricity and retail oil prices.

Meanwhile, the prices of chicken meat, eggs, vegetables and fresh fruit dropped in July.

The inflation rate in the first seven months of this year rose by 3.64 per cent, compared to the same period last year, Mr Yanyong said.

In addition, the commerce ministry reaffirmed that the 2011 inflation will be stand around 3.2-3.7 per cent as earlier projected.

Although there are concerns that some policies of the new government, particularly the Bt300 daily minimum wage and the Bt15,000 minimum starting salary for university graduates, are likely to impact the inflation rate, pushing it upward, it is unclear when these policies  will be implemented, he said.

On the other hand, the two key factors which most directly influence the country’s inflation, were oil prices and the currency exchange rate.

The Dubai crude oil price was forecast to stay around US$78-88 per barrel, if the baht stays at 28.33 to the dollar.

Currently, the Dubai crude oil price has increased to $109 per barrel and the baht remains at 30.56 to the dollar.

Though oil prices have risen, the strong baht helped absorb the impacts, so prices of exported oil products and capital goods are not so high.

Regarding the rising commodity prices in the country which may result in higher inflation rate, Mr Yanyong assured that the ministry can handle it.

He also believed that the new Pheu Thai-led government will adopt necessary measures to cope with it, so the inflationary pressure is not of concern. Inflation in the third quarter this year is projected to stay around 3.6 per cent