Inflation surpasses forecast for May, rising 7.10% y-o-y, highest in 13 years

[webfact]

 

By Panithan Onthaworn

 

Thailand’s headline consumer price index (CPI) surged more than expected in May, rising by 7.10 per cent from a year earlier, due to higher energy prices, the Commerce Ministry said on Monday.

 

The monthly CPI increase exceeded the market forecast of 5.8 per cent and was the highest since July 2008. In April, the inflation rate gained by 4.65 per cent year-on-year.

 

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“The spike in the inflation rate was caused by rising energy prices, as well as the expiration of some government subsidies for living costs,” said Ronnarong Phoolpipat, director-general of the ministry’s Trade Policy and Strategy Office.

 

Full story: https://www.thaienquirer.com/40655/inflation-surpasses-forecast-for-may-rising-7-10-y-o-y-highest-in-13-years/

 

-- © Copyright Thai Enquirer 2022-06-06

 

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[trainman34014]

So; let's call that 8% then !    June likely to be even higher methinks.

[AnotherFarang8]

Thailand is in a quite good position, it has 240 billion USD reserves to keep baht from falling too quickly which is going to slow down the inflation rate but cannot stop it from increasing. Oil hitting $150 later this year and $200 next year will find its way into prices one way or another. As for countries running on deficit budgets, they are screwed.

[Excel]

And that is only the published figure and I am sure reality to most of the population would suggest that the real figure is much higher.

Edited June 6, 2022 by Excel

[billd766]

15 minutes ago, AnotherFarang8 said:

Thailand is in a quite good position, it has 240 billion USD reserves to keep baht from falling too quickly which is going to slow down the inflation rate but cannot stop it from increasing. Oil hitting $150 later this year and $200 next year will find its way into prices one way or another. As for countries running on deficit budgets, they are screwed.

Whilst it has 240 billion USD reserves to keep baht from falling too quickly, the thing that wasn't mentioned was how much debt the country has. How much loans have to be repaid and when,

 

Next years budget I believe is underfunded by more that 0.5 Tr baht which will have to be borrowed from somewhere and added to the nation debt that the Thai people will have to pay.

 

That will be my son and the next 2 or 3 generations. Every year the government borrows more and more instead of cutting expenditure, especially on the "sacred" military.

 

[AnotherFarang8]

6 hours ago, billd766 said:

Whilst it has 240 billion USD reserves to keep baht from falling too quickly, the thing that wasn't mentioned was how much debt the country has. How much loans have to be repaid and when,

 

Next years budget I believe is underfunded by more that 0.5 Tr baht which will have to be borrowed from somewhere and added to the nation debt that the Thai people will have to pay.

 

That will be my son and the next 2 or 3 generations. Every year the government borrows more and more instead of cutting expenditure, especially on the "sacred" military.

 

0.5 Tr baht is like 15 billion USD, but they have 240 billion of reserves, hardly a huge problem.

[mania]

Hang on to your Som Tom as you ain't seen nothing yet ????

[billd766]

10 hours ago, AnotherFarang8 said:

0.5 Tr baht is like 15 billion USD, but they have 240 billion of reserves, hardly a huge problem.

It is a huge problem unfortunately.

 

While you may think it is ONLY like 15 billion USD, This is only the budget for 2023, there are no figures that I have seen that state how much Thailand has to repay in loans this year.

 

https://www.ceicdata.com/en/indicator/thailand/national-government-debt#:~:text=Thailand National Government Debt reached,bn in the previous month.

 

Key information about Thailand National Government Debt

Thailand National Government Debt reached 265.0 USD bn in Mar 2022, compared with 266.8 USD bn in the previous month.
Thailand National Government Debt data is updated monthly, available from Oct 1997 to Mar 2022.
The data reached an all-time high of 266.8 USD bn in Feb 2022 and a record low of 6.3 USD bn in Nov 1997.

 

Now compare that with the $240 billion of reserves, and that $240 Bn doesn't look quite so impressive to me.

[AnotherFarang8]

2 hours ago, billd766 said:

It is a huge problem unfortunately.

 

While you may think it is ONLY like 15 billion USD, This is only the budget for 2023, there are no figures that I have seen that state how much Thailand has to repay in loans this year.

 

https://www.ceicdata.com/en/indicator/thailand/national-government-debt#:~:text=Thailand National Government Debt reached,bn in the previous month.

 

Key information about Thailand National Government Debt

Thailand National Government Debt reached 265.0 USD bn in Mar 2022, compared with 266.8 USD bn in the previous month.
Thailand National Government Debt data is updated monthly, available from Oct 1997 to Mar 2022.
The data reached an all-time high of 266.8 USD bn in Feb 2022 and a record low of 6.3 USD bn in Nov 1997.

 

Now compare that with the $240 billion of reserves, and that $240 Bn doesn't look quite so impressive to me.

You are correct that the total debt is big too but creditors cannot call it all at once. As for servicing the debt, Thailand is quite capable, given its reserves. In the future a lot will depend on which countries will be devaluing their currencies faster. Then again Sri Lanka defaulted on its debts just recently, why couldn’t Thailand do it. As well as others. It happens all the time.

[billd766]

According to an editorial of the other EL paper the government will spend more than 300 billion baht this coming year on pension payments for retired civil servants.

 

About 40% of all collected taxes, topped up by the State borrowing money.

 

This of course will have to be paid for by the Thai taxpayers.

[billd766]

22 hours ago, AnotherFarang8 said:

You are correct that the total debt is big too but creditors cannot call it all at once. As for servicing the debt, Thailand is quite capable, given its reserves. In the future a lot will depend on which countries will be devaluing their currencies faster. Then again Sri Lanka defaulted on its debts just recently, why couldn’t Thailand do it. As well as others. It happens all the time.

Why cannot creditors call it all in at once?

 

Sure Sri Lanka defaulted on its debts recently and look at the state of the country now.

 

 

https://www.bbc.com/news/business-61505842

 

It can damage a country's reputation with investors, making it harder for it to borrow the money it needs on international markets, which can further harm confidence in its currency and economy.

 

Asked on Thursday whether the country was now in default, central bank governor P Nandalal Weerasinghe said: "Our position is very clear, we said that until they come to the restructure [of our debts], we will not be able to pay. So that's what you call pre-emptive default.

"There can be technical definitions... from their side they can consider it a default. Our position is very clear, until there is a debt restructure, we cannot repay," he added.

 

I underlined and bolded the text.

 

 

There is more information in the link.

Edited June 8, 2022 by billd766
Bad spelling

[AnotherFarang8]

On 6/8/2022 at 9:59 AM, billd766 said:

Why cannot creditors call it all in at once?

 

Sure Sri Lanka defaulted on its debts recently and look at the state of the country now.

 

 

https://www.bbc.com/news/business-61505842

 

It can damage a country's reputation with investors, making it harder for it to borrow the money it needs on international markets, which can further harm confidence in its currency and economy.

 

Asked on Thursday whether the country was now in default, central bank governor P Nandalal Weerasinghe said: "Our position is very clear, we said that until they come to the restructure [of our debts], we will not be able to pay. So that's what you call pre-emptive default.

"There can be technical definitions... from their side they can consider it a default. Our position is very clear, until there is a debt restructure, we cannot repay," he added.

 

I underlined and bolded the text.

 

 

There is more information in the link.

The creditors cannot call it all at once because the terms don’t let them, not without repercussions anyway.

There is no reason for Thailand to default but theoretically it can and can start from scratch. Yeah, it won’t be able to borrow from the same group of creditors but there are others who will lend. China comes to mind.