Consumer prices rose for the third straight month in March, driven by fresh food and vegetables as well as higher oil prices.
The consumer price index (CPI), which gauges headline inflation, surged by 1.24% from the same month last year, accelerating from 0.73% year-on-year in February, and 0.27% in January.
Higher prices were boosted by fresh vegetables such as coriander, cabbage, cucumber and chilli, which rose 9.54% because of low supply caused by hot and dry weather. Milled rice prices were up 4.58%, livestock products such as pork and fish increased by 4.70%, and domestic oil prices gained 2.27% from the same period last year.
On a month-to-month basis, prices rose 0.41% in March after a 0.24% rise in February and against a 0.02% contraction in January.
Of the 422 product and service items used to gauge inflation, the prices of 246 items such as pork, eggs, milled rice, fresh food and oil rose last month. The price decreased for 93 items such as white shrimp, shampoo and vegetable oil, while the remaining items saw no price changes.
Core CPI, which excludes volatile food and energy prices, rose 0.58% year-on-year in March and increased 0.02% from February.
For the first three months of the year, headline inflation averaged 0.74% from the same period last year, with core inflation standing at 0.62%
Pimchanok Vonkorpon, director-general of the Trade Policy and Strategy Office, said her agency is closely observing the price of fresh vegetables as they are likely to stay relatively higher in the coming months because of the drought.
"Prices are expected to stay higher in the second quarter, averaging 1.01% for the period driven by oil prices, the drought and higher demand from the Songkran festival," she said. "The beginning of another school year will also result in higher spending."
Despite February's surge in prices, Ms Pimchanok said the ministry is still maintaining its headline inflation forecast at an average 1.2% this year, a range of 0.7-1.7%.
The forecast was made assuming GDP would grow in a range of 3.5-4.5%, with crude oil prices averaging US$70-80 a barrel and an exchange rate of 32.50-33.50 baht to the US dollar.
However, Ms Pimchanok said the forecast excludes a possible daily minimum wage hike.
Thanavath Phonvichai, vice-president of research for the University of the Thai Chamber of Commerce, said rising inflation stemmed largely from the drought and higher oil prices.
"Despite the general election, relatively low core inflation reflects an economic slowdown in line with the slowing global economy," said Mr Thanavath.