By Nopparat Chaichalearmmongkol

BANGKOK--Thailand's consumer prices rose for the seventh straight month in October on the back of higher oil prices, the Commerce Ministry said Tuesday.

The country's headline consumer price index rose 0.34% in October from a year earlier, though it increased at a slower pace compared with a 0.38% rise in September, according to the ministry's report.

Sequentially, consumer prices edged up 0.16% in October, compared with a 0.04% increase the month before.

The ministry said in a statement that the continued rise in inflation could be attributed to the government's stimulus to boost household purchasing power as well as higher oil prices.

The latest inflation readingsfell short of median forecasts for a 0.50% on-year rise in the CPI and a 0.32% gain from the previous month by economists polled by The Wall Street Journal.

Core inflation, which removes volatile food and energy prices, increased 0.74% in October from a year earlier, compared with a 0.75% rise the previous month. On a sequential basis, Thailand's core CPI inched up 0.04%, marginally up from a 0.02% on-month climb in September.

The poll's median forecasts for core inflation were for a 0.76% year-over-year rise and a 0.05% month-over-month increase.

"The softer-than-expected inflation data should be attributed to a slower economic activity in October, in our view," said Sarun Sunansathaporn, an economist at Bank of Ayudhya, in a note. "Clear evidence is that the recent rebound in farm prices did not translate to higher food prices."

He added that local economic activity is expected to rebound after a 30-day mourning period for the lateKing Bhumibol Adulyadej ends on Nov. 13, which should help push headline inflation to the lower end of the Bank of Thailand's inflation target range of 1% to 4% by the end of the year.

And while the latest data suggest inflation remains sufficiently benign and far below the central bank's target, economists still expect the central bank to maintain its benchmark interest rate at 1.5% when its Monetary Policy Committee meets on Nov. 9.

The Commerce Ministry has maintained its 2016 inflationary target of between 0% and 1%.

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(END) Dow Jones Newswires

November 01, 2016 04:45 ET (08:45 GMT)

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