Thailand's inflation rate continued its decline to 2.2% in November, bringing the yearly rate to a range of 5.6-5.9%, according to Siripol Yodmuangcharoen, the permanent secretary of the Commerce Ministry.

The consumer price index in November dropped from a 3.9% annualised rate in October. The rate is the lowest in 14 months, as fuel prices have dropped sharply from a peak in July of US$140.63 a barrel to $47.61 yesterday.

Costs of rice and rubber, of which Thailand is the world's largest exporter, have also slumped on worries that demand may fall as world economies slow. Core consumer prices, which exclude fresh food and fuel, climbed 2% in November, slower than a 2.4% increase in October.

Mr Siripol said inflation for the year was 5.9% due to the rise in fuel prices by 23%, food and beverage by 11.4% and non-food and beverage by 2.6%. ''The inflation rate in Thailand is rising at a slower pace, the same as in other countries. We don't expect deflation,'' he said. He predicted consumer prices would rise next year between 2.5% and 3.5% based on Dubai crude oil prices of $60-70 a barrel and an exchange rate of 35-36 baht a dollar.

The ministry's inflation rate forecast is in contrast to the deflation prediction by some academics who have used different figures in their calculations. They assume crude prices at $40-50 a barrel and do not account for the exchange rate.

''Actually, the exchange rate has an impact on the inflation rate. We also have wages in the calculation,'' said Mr Siripol.

The ministry also believes that the expiry of the government's measures to lessen living costs through subsidised utility bills and transport fares to the public in January would bring inflation up by 1% next year.

Vatchari Vimooktayon, the deputy director-general of the Internal Trade Department, said the decline of oil prices should reduce pressure on local product prices so the department would closely monitor them, especially food.