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Thai inflation rate slows in June

BANGKOK (AFP) -- The Thai government on Thursday said the economy remained stable as official data showed the country's inflation rate slowed marginally in June.

The kingdom, which has shown economic resilience to the two months of deadly protests that ended in May, posted a 3.3 percent rise in consumer prices last month in the ninth straight year-on-year increase for the measure, the commerce ministry said.

But the hike was weaker than the 3.5 percent jump seen the previous month as it was weighed by lower oil prices and a stronger comparative period a year earlier.

Core inflation, which strips out the food and energy sectors, rose 1.1 percent year-on-year in June.

This figure was slightly slower than forecasts from analysts, who are watching closely for any signs that the Bank of Thailand (BOT) will raise official borrowing costs.

Researchers at Capital Economics say interest rates could be raised in the next three months, but warn that the policy change could be delayed by a planned change of leadership at the central bank.

Analyst Sukhy Ubhi said the state of emergency in place as a result of the anti-government protests could yet be extended and "this would also probably keep the BOT on hold for longer".

A 6.1 percent increase in food inflation was a significant contributor to the June figure, pushed up by a 20.1 percent rise for fresh vegetables and 15.8 percent higher fruit prices.

For the first six months of 2010, the average consumer prices rate was 3.5 percent, compared to last year, while core inflation was 0.7 percent.

The commerce ministry forecasts full year inflation to be between 3.0 percent and 3.5 percent, based on predictions for an oil price range of 70 to 80 dollars per barrel.

-- (c) Copyright AFP 2010-07-01