• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Expensive Fuel Could Raise Inflation Rates

Posted on: Thursday, 5 January 2006, 00:00 CST

By Phusadee Arunmas, Bangkok Post, Thailand

Jan. 5--Soaring fuel prices and fluctuation in the exchange rate could cause Thailand's inflation rate to surge from 5.8 percent to 6 percent in average during the first quarter of 2006.

The permanent secretary for commerce Karun Kittisataporn said yesterday that although fuel prices were capped for most of last year, the cost of petroleum was still a crucial factor in edging up the headline inflation average to 4.5 percent in 2005, from 2.7 percent in 2004.

Affected by expensive oil, last year's prices of public transportation and consumer products, in addition to electricity bills, have risen. He expressed concerns that without price capping, fuel prices would have an imminent impact on the inflation rate this year, the first quarter in particular.

However, he said the Commerce Ministry would launch measures to curb consumer-product prices in order to keep the inflation rate at no more than 4.5 percent this year, down from the 5 percent estimated by the central bank.

He expected that the impact from fuel prices and uncertainty in the exchange rate would be moderate after the first quarter, causing inflation for the remainder of the year to average 3.5 percent.

His forecast was based on prices of crude oil in Dubai of US$50-55 a barrel and the exchange rate of 42 baht against the US dollar.

Meanwhile, Commerce Minister Somkid Jatusripitak said that the government will continue its price-pledging programme for farm products this year in order to raise income for farmers.

To promote exports, he has instructed Ministry officials to focus on the market-access policy, with certain destinations outlined internationally. For example, China, Japan and South Korea are targeted countries for the East Asia region, while Germany, France and Italy are focus countries for the European Union.

He said restructure of duties of commercial counsellors would be necessary to achieve export promotion plans.

-----

To see more of the Bangkok Post, or to subscribe to the newspaper, go to http://www.bangkokpost.com.

Copyright (c) 2006, Bangkok Post, Thailand

Distributed by Knight Ridder/Tribune Business News.

For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

Source: Bangkok Post

More News in this Category