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Thailand’s Inflation Rate Climbs to 14-Month High


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Jan. 4 (Bloomberg) -- Thailand’s inflation accelerated to a 14-month high amid rising food and commodity prices, adding to signs the nation is emerging from its yearlong recession.

 

Thailand’s consumer prices fell in the nine months through September as the global slowdown pushed the Southeast Asian nation into a recession. Bank of Thailand Deputy Governor Bandid Nijathaworn said Dec. 25 the central bank will consider exiting monetary stimulus when the economy recovers as it seeks to balance between spurring growth and taming inflation.

 

“We will continue to see accelerating inflation early this year,†Pimonwan Mahujchariyawong, an economist at Kasikorn Research Co. in Bangkok, said before the report. “But economic recovery remains fragile, so we don’t think the central bank will make any move until the middle of the year.â€Â

 

The central bank kept its benchmark interest rate unchanged at a five-year low of 1.25 percent for a fifth straight meeting last month after cutting borrowing costs by a total of 2.5 percentage points from December 2008 to April last year.

 

Inflation may accelerate to between 3 percent and 4 percent in the first quarter, the Bank of Thailand said Dec. 25. The increase will be temporary as it’s mainly due to oil-price fluctuations, and doesn’t reflect “price pressure†from rising demand, the central bank said.

 

The Thai Cabinet last month approved the central bank’s 2010 inflation target of between 0.5 percent and 3 percent, unchanged from last year’s goal. The target is based on an average of core inflation, excluding fresh food and fuel prices.

 

Thailand’s core inflation index rose 0.2 percent last month from a year earlier, the Commerce Ministry said. The median forecast in a Bloomberg survey of nine economists was for a 0.3 percent increase.

 

The central bank last month forecast that core inflation will accelerate to as much as 2 percent in the first half of this year after a government subsidy program for low-income earners expires.

 

http://www.businessweek.com/news/2010-01-03/thailand-s-inflation-rate-climbed-to-14-month-high-in-december.html

 

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