Thailand’s March consumer prices fall on cheaper oil

Thailand’s consumer prices fell for a third month in March as oil costs halved from a year earlier and the deepening global recession weakened demand. The consumer prices dropped 0.2 percent from a year earlier, after declining 0.1 percent in February, the Commerce Ministry said today in Bangkok. The median estimate of 14 economists in a Bloomberg survey was for a 0.4 percent decline. The falling prices have allowed Thailand’s central bank to reduce its key interest rate by 2.25 percentage points to 1.5 percent since early December, its most aggressive string of cuts ever.

The governor Tarisa Watanagase said borrowing costs can be eased further if needed to sustain the economy, which the government may contract for the first time in 11 years. “This gives more room for the central bank to cut interest rates,” said Julia Goh an economist at CIMB Investment Bank Bhd. in Kuala Lumpur. “But there’s not so much the rate can do now against the backdrop of weak demand and tight bank lending.

Here Prime Minister Abhisit Vejjajiva is boosting, spending and giving cash handouts to low-income earners to help spur local demand, hurt by political turmoil and the worsening economic outlook.

The price of crude oil, almost all of which Thailand imports, has fallen 52 percent in the past year. Manufacturing production dropped for a fourth month in February, the longest contraction in a decade. “The oil price is the key factor dragging consumer prices into negative territory,” Siripol Yodmuangcharoen, permanent secretary for commerce, told reporters in Bangkok today.

The commerce ministry said, “Thailand’s core inflation index, which excludes fresh food and fuel, rose 1.5 percent last month from a year earlier”.

Soldier Loses Limb In Land Mine Blast

Thai and Cambodian military officials said a Thai soldier lost his leg after stepping on a land mine Thursday (2 April) but disagreed over which country he was in at the time, the latest flare-up in a tense border dispute. The soldier was injured near the 11th century Preah Vihear temple, which is on a cliff along the countries’ ill-defined border and has been a source of conflict for decades. Troops from both countries have been stationed at the border since July 2008, and two clashes near the temple last year sparked brief concerns of war.

According to Phnom Penh, the mine exploded after a group of Thai soldiers crossed into Cambodian territory. The blast prompted the soldiers to fire shots into the air and put Cambodian troops on alert, said Yim Kheang, a Cambodian soldier at the border. They received orders from the commander that if Thai soldiers enter Cambodian territory (again), that they have the right to open fire.

Thai Maj. Gen. Tawatchai Samutsakorn disputed that account.”The Thai troops were not in Cambodian territory,” he told the AP, saying the wounded soldier was a 46-year old paramilitary trooper on a patrol near the border in Thailand’s northeastern Sisaket province.