Thai February inflation hits 13-year high on oil price

Thailand's headline consumer price index (CPI) jumped by a stronger than expected 5.28 per cent in February from a year earlier, the fastest pace since September 2008, driven mainly by higher energy prices, the commerce ministry said on Friday.

The reading compared with a forecast for a rise of 4.05 per cent in a Reuters poll and followed January's 3.23 per cent increase, breaching the top end of the Bank of Thailand (BOT)'s 1 per cent-3 per cent target range.

The BOT last month said inflation could break above the target range in early 2022, but average inflation for the year should be inside the range, with its policy rate at a record low of 0.50 per cent since May 2020 to support a fragile recovery.

The finance ministry and the BOT would closely monitor the situation to ensure it did not disrupt a gradual economic recovery, commerce ministry official Ronnarong Phoolpipat said.

"It's a signal to follow but not to worry too much," he told a news conference, adding the price rise did not require further measures yet.

"Inflation has been driven by higher energy prices... not by the economy or currency".

Last month, Finance Minister Arkhom Termpittayapaisith said Thailand would not be in a position to consider any interest hikes until the economy was fully recovered.

Headline inflation is likely to stay high in March, possibly at 4 per cent-5 per cent if oil prices stay over $100 per barrel, Ronnarong said, adding the ministry would review its 2022 inflation forecast of 0.7 per cent-2.4 per cent next month.

In February, the core CPI index, which strips out volatile fresh food and energy prices, was up 1.8 per cent from a year earlier, also beating a forecast for a 0.62 per cent rise.