Inflation hit a two-year high of 6.2% in April, driven by high oil and food prices, prompting the Commerce Ministry to revise its annual inflation forecast up to 5-5.5% from 3-3.5%. According to Siripol Yodmuangcharoen, the ministry's permanent secretary, food and beverage prices rose 9.8% last month. The fastest-growing items included rice, flour and cereal products, meats, fresh chicken, eggs and dairy products, fruits and vegetables, and seasonings and condiments.

Non-food and beverage prices increased 3.9% over the same month last year, propelled mainly by a hike in fuel oil prices, which rose by 24.8%, the highest in 23 months.

On a monthly basis, the consumer price index rose 1.8% from March because of energy prices. Global oil prices continued to rise, pushing up transport costs and expenses for fresh foods.

Monthly food prices increased by 3.4% while non-food prices increased marginally by 0.8%.

For the first four months, the index averaged 5.3% with food prices rising 7.6% and non-food prices climbing 3.9%.

Core inflation, which excludes fresh food and fuel prices, accelerated to 2.1% in April from 1.7% a month earlier, with the rate for the four-month period rising 1.6%.

''Despite being relatively high, inflation at this rate is unlikely to become detrimental to the economic system, as the price increases reflect rising oil prices,'' said Mr Siripol. ''The Commerce Ministry insists it's trying its best to curb the inflation rate at a manageable level and keep the rate lower than that of oil prices.''

According to the ministry, Thailand's inflation reached 8.1% in 1998 and topped 20% from 1973 to 1979 due to the world oil shock.

Mr Siripol said the ministry had revised up average inflation for this year to 5-5.5% from 3-3.5% after oil prices jumped to more than US$100 per barrel and the baht rose even higher against the US dollar.

The revision was based on projections that oil prices would average $100-105 per barrel, the foreign-exchange rate 31-32 baht to the dollar and interest rates 3.25%.

Earlier, the ministry projected that oil prices would average $85 per barrel, with the baht at 33-33.50 per dollar.

On recently approved sugar prices and an anticipated increase in minimum wages, Mr Siripol said there might be an impact on inflation but the rate of the impact was expected to be just marginal.

However, Somphob Manarungsan, an economist at Chulalongkorn University, warned that April's higher inflation rate was quite worrisome.

He said the cause of local inflation was increasingly complicated since it stemmed from food prices, costs and money supply