Inflation surge
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Prices don't just seem to be going up. The Commerce Ministry announced on Monday that inflation during February was 5.4 per cent - the highest for 20 months.

Food and fuel costs climbed, making it more difficult for the central bank to cut interest rates to spur economic growth, deputy permanent secretary Pairote Sudsawarng told a press conference.

Consumer prices gained 5.4 per cent last month from a year earlier. In January, inflation was a relatively lower 4.3 per cent year on year.

Core inflation, which excludes energy and fresh food prices, rose 1.5 per cent in February compared with the same month in 2007 - up from a 1.2 per cent rise in January.

The Bank of Thailand now faces a difficult choice, as fighting inflation by raising rates would accelerate the appreciation of the baht, which it is trying to resist in order to support exporters, analysts say .

"The central bank wants to cut rates, but they can't because of rising inflation," said Nuchjarin Panarode, an economist at Capital Nomura Securities Pcl, in an interview with Bloomberg news agency.

According to the Commerce Ministry announcement, prices of instant noodles and cooking oil are rising in line with soaring commodities and production costs. Pork prices have climbed 39 per cent since New Year's Day. (BangkokPost.com, Agencies)

bangkokpost.net