Inflation soared to a 10-year-high of 9.2 per cent in Jul prompting an interest rate hike, but has steadily fallen since then, and is down from a 6.0 per cent year-on-year rise in Sept.

'The inflation rate dropped... due to falling oil prices and lower prices of domestic consumer products, which have been controlled by the commerce ministry,' said Mr Siripol Yodmuangcharoen, permanent secretary at the ministry.

'Inflation over the next two months is not likely to be high.'

The Ministry of Commerce lowered its forecast for 2008 inflation to 5.9 to 6.3 per cent, down from earlier predictions of 6.5 to 6.9 per cent. Inflation in the first ten months of the year averaged 6.3 per cent, it said.

Soaring inflation earlier this year prompted the Bank of Thailand to raise interest rates by 25 basis points to 3.75 per cent in Aug. The central bank is due to meet again in Dec to discuss the core rate.

The inflation rise earlier this year was attributed to rocketing global oil prices, which hit record highs of more than 147 dollars a barrel in Jul. They have since fallen to about US$65 (S$95.54) a barrel.

Thailand's economy has also been shaken by ongoing anti-government street protests and the global financial crisis, with the stock market falling about 50 per cent since late May. -- AFP