ECONOMY
Inflation hit a 13-month high in December, as subsidies failed to counter rising prices for food and fuel and the rate bounced back from a low base recorded a year earlier when the country was caught in massive flooding.
Vatchari : Wage impact not much
The index of consumer prices rose 3.63% last month from the same period the year before, compared with a 2.74% rise in November.
December inflation was driven by higher prices for fresh vegetables and fruits, poultry and pork, said Vatchari Vimooktayon, the commerce permanent secretary.
Consumer prices rose 0.39% in December from the previous month, the Commerce Ministry said. Inflation averaged 3.02% in 2012.
Core inflation, which excludes fresh food and fuel costs, was 1.78% year-on-year last month and averaged 2.09% in 2012 as a result of cost-of-living measures such as price controls and the cap on diesel prices.
Pressure from crude oil prices was not notably strong, said Mrs Vatchari.
The ministry predicts a 2013 oil price gain of 2.8% to 3.4%, based on Dubai prices estimated at US$100-120 a barrel and a foreign exchange rate between 28.50 and 32.50 baht to the dollar.
According to a ministry study, the nationwide rise in the daily minimum wage that began Tuesday will have a trifling effect on goods prices.
Prime Minister Yingluck Shinawatra's government last month extended the diesel tax cut to the end of January and approved a new round of increases in the daily minimum wage to 300 baht from Jan 1, after a similar rise last April in seven provinces including Bangkok.
"The impact of the wage increase will not be much, and price gains this year are expected to be within the range forecast," said Mrs Vatchari.
The ministry is preparing to use 2011 instead of 2007 as the base year for calculating inflation, increasing the number of consumer items to 450 from 417 now.
The added items will include natural gas for vehicles, interprovincial taxi vans, security guard payments and nursery costs.
The new index will be announced in February when data for January is released.
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Article source: http://www.thethailandlinks.com/2013/01/03/food-drives-december-inflation/
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