Thailand's headline consumer price index marks biggest drop in nearly 11 years

 

FILE PHOTO: A woman shop sat a supermarket inside a department store in central Bangkok, Thailand, January 31, 2017. REUTERS/Chaiwat Subprasom

 

BANGKOK (Reuters) - Thailand's headline consumer price index (CPI) fell 3.44% in May from a year earlier, its biggest contraction in nearly 11 years and more than expected, commerce ministry data showed on Thursday.

 

While there is a risk of deflation if the economy does not perform as well as expected, Thailand is not currently in deflation as the inflation rate has been negative for just three months, Don Nakornthab, senior director of the central bank's economic and policy department, said in a statement.

 

Deflation would entail a prolonged period of negative inflation as well as price falls in several goods and services sectors and other factors, he said.

 

He added that the central bank, which is monitoring the situation closely, expects negative inflation for the rest of the year before turning positive next year.

 

The reading compared with expectations of a 2.95% decline in a Reuters poll, and with a fall of 2.99% in April. The central bank targets headline inflation of 1%-3%.

 

The annual core inflation rate was 0.01%, which compares compared with a forecast of 0.35%, and April's 0.41%.

 

-- © Copyright Reuters 2020-06-04

 

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It should also be remembered that Thailand ordered heavy discounting of prices on essential goods like rice, oil etc up to 50% to assist the poor and unemployed, which will factor into this number.

However, a significant and prolonged reduction of consumer spending ability is likely to drag prices across the board downwards. Only when the money supply and consumer demand increases are we going to see upward numbers and good luck with seeing that happen by the start of next year.

Reducing prices for a while instead of increasing them may have to become the new normal, even for Thailand.

So does this explain why a smartphone that did cost 9000 Philipino pesos is available in Thailand for 4,500 baht?

 

1 peso equals 0.63 baht

 

 

Edited June 4, 20206 yr by OneeyedJohn

USD hammered again today.  That doesn’t bode well for the future.

17 hours ago, darksidedog said:

It should also be remembered that Thailand ordered heavy discounting of prices on essential goods like rice, oil etc up to 50% to assist the poor and unemployed, which will factor into this number.

However, a significant and prolonged reduction of consumer spending ability is likely to drag prices across the board downwards. Only when the money supply and consumer demand increases are we going to see upward numbers and good luck with seeing that happen by the start of next year.

Reducing prices for a while instead of increasing them may have to become the new normal, even for Thailand.

Having been in Tesco's, Big C, Makro and local markets, all the prices have gone up over the last 3 months not down!! ????????????????

In my humble meaning the CPI dropped so much because of the incredible drop of the gasoline price. I haven't noticed any price drops in the super markets, none at all.

I noticed the drop in auto fuel prices, but nothing of note in any shop or suoermarket. Prices for items I bought were the same or increased.

I would appreciate if someone could point me to the things that have been reduced in price other than fuel (which is already rising again), food here is very expensive in general.