July 1, 2011
BANGKOK (AFP) - Inflation in Thailand slowed in June, government data showed Friday, adding to speculation that interest rates will be kept on hold his month after a series of increases to prevent overheating.
The consumer price index rose 4.06 percent last month from a year earlier, compared with a rise of 4.19 percent in May, the commerce ministry said.
Month-on-month prices edged up 0.13 percent in June.
The central Bank of Thailand (BoT) has raised the official cost of borrowing seven times since July 2010, by a total of 1.75 percentage points to 3.0 percent, in an attempt to control inflation.
There is speculation that monetary authorities might now mark a pause at its next meeting on July 13, waiting to see how the outlook for the economy unfolds following a Thai general election to be held this Sunday.
"Whether the BoT will lift the rate at the upcoming policy meeting on July 13 is a close call but I think it will pause to see how the political situation will develop after the July 3 election," HSBC economist Wellian Wiranto told Dow Jones Newswires.
The commerce ministry predicted inflation would remain in a range of 3.2-3.7 percent this year.
The Thai economy returned to growth in the fourth quarter of 2010 on the back of solid exports and private consumption, snapping out of a brief technical recession.
Economic growth accelerated to 2.0 percent quarter-on-quarter in the three months to March, the quickest pace in a year, helped by surging exports, the government said in May.
