By Nopparat Chaichalearmmongkol

BANGKOK--Thailand's headline inflation rate rose in November at the fastest pace in nearly two years, gaining for the eighth straight month on the back of higher tobacco, oil, food and beverage prices, government data showed Thursday.

The headline consumer price index rose 0.60% in November from a year earlier, compared with a 0.34% gain in October, the Commerce Ministry said. However, on a monthly basis the CPI fell 0.06% in November compared with a 0.16% rise in October.

The year-over-year inflation reading was in line with median forecasts for a 0.6% increase by economists polled by The Wall Street Journal. The sequential reading came inslightly worse than the 0.01% decrease forecast by economists in the poll.

ANZ Research said the headline inflation rate--which was the highest reading since December 2014, when it also hit 0.60%--rose on the back of base effects.

Core consumer prices, which exclude volatile food and energy items, rose 0.72% in November from a year ago, compared with a 0.74% increase in October. Core CPI rose 0.03% sequentially, with the pace of growth slightly slowing from a 0.04% increase in the previous month.

The core CPI readings came in marginally lower than the poll's median forecasts for a 0.73% year-over-year rise and a 0.04% sequential increase.

During the first 11 months of this year, Thailand's headline CPI edged up 0.1% from a year ago, while core inflation rose 0.74%.

The ministry still maintains its headline inflation rate forecast for 2016 at between zero and 1.0%, as it expects the government's year-end spending measures, including cash handouts to low-income earners and tax breaks, will help buoy consumer prices.

For 2017, the ministry estimates the inflation rate will be between 1.5% and 2.0%, attributing the increase to a higher gross domestic product forecast, an expected rise in oil prices and a weaker baht.

Economists appeared to be in agreement with the Thai government.

"Barring another round of oil price declines, headline inflation should maintain its slow ascent in 2017," said ANZ. "However, we expect the subdued recovery in private activity to cap consumer price gains."

Sarun Sunansathaporn, an economist at Bank of Ayudhya, said he believed headline inflation will return to the lower bound of the Bank of Thailand's inflation target range of 1.0%-4.0% band in December. This is expected to come on the back of a planned output cut by OPEC that should result in a rebound in oil prices, the Thai government's year-end tax incentives and cash handout programs that will likely add upward pressure on demand-side inflation, and a base effect.

Write to Nopparat Chaichalearmmongkol at nopparat.chaichalearmmongkol@wsj.com

(END) Dow Jones Newswires

December 01, 2016 03:15 ET (08:15 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.