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Thai producers urged to extend price-freeze till end-2014

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Thailand's commerce minister said he will ask businesses that agreed to freeze prices through November to keep them frozen until the end of the year in a bid to boost consumption and revive the struggling economy. - PHOTO: BLOOMBERG

[Bangkok] Thailand's commerce minister said he will ask businesses that agreed to freeze prices through November to keep them frozen until the end of the year in a bid to boost consumption and revive the struggling economy.

The ministry wants produce producers to cap prices "at least until the end of this year. We will also ask them to cut prices of some products for the New Year," Gen Chatchai Sarikulya, the minister, told reporters on Friday.

In May, the Thai army took power in a bid to end months of political unrest that hurt confidence and business activity.

In June, the junta asked manufacturers of 205 categories of necessary consumer goods to freeze prices for six months, through November.

Inflation in Thailand has been benign, curbed by government controls and subsidies. The annual headline rate fell to a nine-month low of 1.75 per cent in September, giving the central bank room to keep interest rates low to support growth.

But consumption, a major engine of growth, remains weak nearly five months after the coup. In September, an index of consumer confidence dropped for the first time since May.

Southeast Asia's second-largest economy shrank 0.1 per cent in the first half of 2014. The central bank has forecast growth of 1.5 per cent for this year, which would be the lowest since 2011, when Thailand had devastating flooding.

-REUTERS