Full-year inflation rate put at under 3.4%
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Commerce upbeat after Q1 rate of 3.09%
The Commerce Ministry is confident inflation this year will not surge beyond 3.4 per cent as goods prices are expected to remain calm, leaving breathing room for a cut in the policy interest rate to curb the baht’s appreciation.
“The situation next year should not be tense because most goods prices will be unchanged, as the cost of production is stable. Market competition will also help control the cost of living this year,” permanent secretary Vatchari Vimooktayon said yesterday.
The year-on-year rise in the Consumer Price Index slowed last month to 2.69 per cent from 3.23 per cent in February.
Month on month, inflation was 0.07 per cent, mainly on higher food prices.
Last quarter, the CPI climbed 3.09 per cent year on year. The inflation rate is projected to stay at 3.1 per cent this quarter.
Inflation should come under the ministry’s forecast of 2.8-3.4 per cent this year on expected stable goods prices, lower fuel costs and the extension of the government’s cost-of-living relief measures to September, Vatchari said.
Whether the government decides to lower the policy rate will depend on the Monetary Policy Committee, but inflation is not a factor to worry about, she said.
The ministry’s 2013 inflation projection assumes an exchange rate of Bt28.5-Bt32.5 against the US dollar and an average Dubai crude-oil price of US$100-$120 per barrel.
The slide in the CPI was mainly due to the decline in the non-food-and-beverage index of 0.04 per cent, while the food-and-beverage index rose 2.80 per cent, mainly on the increase in the prices of vegetables and fruit as the country enters the drought season.
Of the basket of goods used to calculate the March CPI, 161 products increased in price, 77 decreased and 212 products were unchanged.
Core inflation last month was 1.23 per cent year on year and down 0.01 per cent month on month.
Core inflation in the first quarter was 1.47 per cent year on year, well within the Bank of Thailand’s target band of 0.5-3 per cent.
