Thailand inflation plunges near four-year low in July

BANGKOK, Aug 1, 2007 (AFP) – Thailand’s inflation rate hit a 43-month low of 1.7 percent in July, despite rising food prices, as consumption remained slow, the Commerce Ministry said Wednesday. It was the fifth consecutive rate cut this year and came amid government calls on the bank to tame the volatile baht after the currency reached 10-year highs against the dollar. Year-on-year inflation slipped from 1.9 percent in June, slightly lower than the market’s expectations, as food prices rose 5.0 percent while energy costs dropped by 3.0 percent.

Core inflation, which excludes volatile food and energy prices, increased just 0.8 percent year-on-year in July.

July inflation was up 0.1 percent when compared with June.

Karun Kittisathaporn, the ministry’s permanent secretary, said inflation was the lowest since January 2004 but still in line within the ministry’s target.

“We have seen no sign of deflation as inflation has not crashed,” he said, adding that inflation was likely to rise in August.

Consequently, the ministry has maintained its inflation estimate at 1.5-2.5 percent for this year, Karun told reporters.

Pimonwan Mahujchariyavong, head of the macroeconomic div