Consumer price index weakens
Thailand's consumer price index in February weakened slightly from the previous month, despite continued hikes in fuel and food prices.
According to the Commerce Ministry, the CPI rose up 3.35 per cent year on year last month. This pushed inflation in the first two months up by 3.36 per cent.
Yanyong Phuangrach, permanent secretary for commerce, said that inflation is likely to grow consistently due to the expected increases in fuel prices in the following months.
However, he is convinced that inflation should be under control, as the government is putting in place stringent rules to control increases in goods prices.
Siam Commercial Bank's economic research unit noted that though headline inflation slightly weakened from 3.38 per cent frmo January to 3.38 per cent in February, overall goods prices increased particularly fuel. In February, the energy price index crept 3.1 per cent from February, as oil prices rose on concern over sanctions against Iran as well as the increases in domestic LPG and NGV prices.
The unit maintains the view that inflation for 2012 would remain within 3.5-4 per cent, to be relatively higher than last year due to many factors like the minimum wage increase, pledging schemes for agricultural products, adjustments in energy prices and public spending on post-flood investment.
It expected the policy rate to remain at 3 per cent through the end of this year, as core information should be within the Bank of Thailand's target. Thanks to economic recovery, there is less chance for a cut in policy rate unless the eurozone debt crisis sparks another global shock.
