Thailand's inflation rate struck 3.5 per cent in November despite falling oil prices as food costs jumped after floods swept through much of the country, the Commerce Ministry said yesterday.

Inflation has been heading back up after hitting a 19-month low of 2.7 per cent in September and then creeping to 2.8 per cent in October.

Month on month, November inflation edged down by 0.1 per cent as severe flooding started to ease and oil prices fell slightly.

The increase was led by food, which jumped 5.8 per cent, with vegetables prices up 28.1 per cent and rice up 43.6 per cent, the ministry said.

Karun said that although the inflation this year didn't increase drastically from last year, there are some items that saw a rapid rise. For instance, sticky rice rose by 52 per cent from the same period last year from Bt15 a kilogramme to Bt22.

Prices for non-food items slipped 0.1 per cent as oil prices dropped by 0.7 per cent from a year earlier.

Core inflation, excluding volatile food and energy prices, was up to 1.7 per cent in November year on year and flat month on month.

For the first 11 months of the year, Thailand's inflation rate was 4.8 per cent.

The ministry expects the 2006 rate to fall between 4.5 and 5.0 per cent.

"We are confident that the inflation rate will decline next year as high fuel prices and interest rates pushed inflation to a high level this year," said the ministry's permanent secretary Karun Kittisathaporn.

"Given stabilised oil prices and the current peak of interest rates, we don't expect other factors to push inflation to rise next year," he told reporters.

Besides, the cheap imported prices have played a role in curbing the inflation rate.

Karun said that the inflation rate of 4.6 to 4.8 per cent is considered appropriate. It is in line with the forecast by the Commerce Ministry that the inflation rate should be lower. The appreciation iof Thai baht which is around Bt36 a dollar helped ease the inflation pressure.

Thailand has suffered prolonged and widespread flooding since August.

At the peak of the floods in October, water had inundated 47 provinces in central and northern areas.

Some 300 people were killed and damage has been estimated at Bt6.9 billion.