Thailand's inflation rate rose to a 7-year high of 5.6 percent year-on-year in August, due to climbing prices of oil, food and drink and consumer products, announced Commerce Ministry.

The higher figure prompted the ministry to revise its forecast for all-year inflation rate to 4-4.2 percent from the original estimation of 3.8-4.2 percent.

"The average inflation rate hit 3.8 percent over the past 8 months and is expected to top 4 percent in the rest of the year," newspaper Nation Friday quoted Karun Kittisataporn, permanent secretary of commerce, as saying.

The new forecasts were based on Dubai crude oil prices averaging 50 US dollars to 52 dollars a barrel for the year, said Karun.

Dubai oil futures Thursday were traded at around 60 dollars in Singapore.

With the global oil prices climbing, Thailand has also witnessed core consumer price index rising 2.3 percent in August year-on-year.

The consumer price index of food and beverages also rose 1.3 percent in August from July, driven by price hikes in chicken, fish and fishery products, vegetables, fruit, finished food and non-alcoholic beverages.

The Bank of Thailand is now expected to raise its interest rates above the inflation rate, though it has raised interest rates six times since August 2004.

The central bank raised its 2005 average inflation forecast to 4-4.5 percent in late July from the 3-4 percent it projected in April.

Source: Xinhua