Southeast Asia's second-largest economy's recovery has lagged that of others in the region as the crucial tourism sector only started to rebound this year.

From January to April, the power tariff for businesses will increase by 20.5% to 5.69 baht ($0.1640) per unit, with that of households remaining at 4.72 baht, the Energy Regulatory Commission said earlier, citing higher fuel costs.

The business group urged the government to delay the price hike as manufacturers would be forced to increase the price of goods, said the group, which includes representatives from industry, banking and commerce.

"The hike will have a severe impact on people's costs of living and the cost of the manufacturing and service sectors still in recovery," said Isares Ratanadilok Na Phuket, vice chairman of the Federation of Thai Industries.

The move will reduce Thailand's competitiveness and attractiveness as power costs for businesses will be 50-120% higher than those in countries like Vietnam and Indonesia, said Roongrote Rangsiyopash, president of industrial conglomerate SGC.

Surong Bulakul, vice chairman of the Thai Chamber of Commerce, said higher power prices could increase inflation to 3.5% next year, from 3% currently forecast, with interest rates on the rise.

On Monday, the central bank said it would continue to raise rates for a while to help the economy and curb inflation.

($1 = 34.70 baht)

(Reporting by Orathai Sriring, Kitiphong Thaichareon; Editing by Kanupriya Kapoor)