April 2, 2011
BANGKOK (AFP) - Thai inflation accelerated in March, the Commerce Ministry said Friday, stoking expectations of another interest rate hike later this month.
The consumer price index rose 3.14 percent year on year, compared with a 2.87 percent increase in February.
The central Bank of Thailand raised the official cost of borrowing to 2.5 percent in March, the fifth hike in eight months, blaming surging oil and commodity prices on increasing inflationary pressure.
Rate-setters are due to meet later this month and Siam Commercial Bank's macroeconomic analysis manager Pornthep Jubandhu told Dow Jones Newswires the central bank was likely to focus on price stability rather than growth.
The bank predicted rates to be raised to 2.75 percent at the April 20 meeting.
Food prices were 5.87 percent higher year-on-year, partly due to a sharp rise in the cost of fresh vegetables after heavy rains caused widespread flooding that destroyed crops in southern Thailand at the end of the month.
Core inflation, excluding the volatile food and energy sectors, rose 1.62 percent in March, compared to last year.
The Commerce Ministry maintained its inflation forecast for 2011, at between 3.2 percent and 3.7 percent.
