Thai inflation stable in November

Thursday, 2 December 2010 00:59 - - {{hitsCtrl.values.hits}}

BANGKOK, (AFP) - Thailand’s inflation was stable in November at 2.8 percent year-on-year, the commerce ministry said Wednesday, as policymakers were expected to hold interest rates when they meet later.

The figure was unchanged from October’s 2.8 percent rise in the consumer price index (CPI), according to Yanyong Phuangrach, the ministry’s permanent secretary.

He said prices for the first 11 months of 2010 rose 3.4 percent from a year earlier, adding that he anticipated the full year rate to be 3.3 percent.

Core inflation, which excludes food and energy sectors, 1.1 percent for November year-on-year, down from 1.3 percent in October.

The central bank is forecast to hold the benchmark interest rate steady at 1.75 percent when it meets Wednesday afternoon.

The figures come after data last month showed the kingdom has slipped back into recession, contracting for two consecutive quarters as a stronger baht and a weaker global economy put the brakes on exports.

Gross domestic product (GDP) shrank 0.2 percent in the three months through September from the previous quarter, when it contracted by a revised 0.6 percent, according to official estimates.

Despite the contraction, the government slightly upgraded its GDP growth forecast for this year to 7.9 percent thanks to a strong performance earlier in the year.

The Thai economy remained relatively resilient in the face of deadly political violence in April and May, but it has not been immune to a slowdown in the United States and Europe as well as a slumping dollar.

The Thai baht, along with other Asian currencies, has been surging against the greenback as a flood of foreign funds sent it to a 13-year high, undermining exporters.