Inflation At 10-year High

[sriracha john]

Inflation 'likely even higher' in 2009

Raging inflation could be worse next year and stay in double-digit territory as businesses would be under pressure to adjust costs and raise prices after they have depleted their inventories, a leading economist warned yesterday.

Virabongsa Ramangkura, a former Deputy Prime Minister, said that even if oil prices stay at US$120 (Bt4,000) to $150 per barrel next year, inflation will continue to rise into double figures.

"I believe that inflation will continue to rise and it will stay at the double-digit figure next year. This year it might touch 10 per cent or slightly more. But next year it will rise even further as businesses have to adjust their costs after using up their inventories," he said.

The inflationary pressure is compelling many businesses to embark on drastic restructuring of their operations to cope with the high-cost environment.

"It's a bad period, particularly for weak companies. Even major companies would need to evaluate their basic functions and streamline their businesses to save costs," Pornwut Sarasin, vice chairman of local Coca-Cola bottler Thai Namthip, said yesterday.

The airline business, for instance, had scaled down operations by grounding long-haul, loss-making routes, he said. Most of the budget airlines were now suffering losses and might go belly up.

"The soft-drink industry has been rocked by the rampant inflation as we rely heavily on transportation and sugar, whose prices are influenced greatly by inflation. Everything in the production process is connected to the use of energy," he said.

The price of sugar had jumped by about 38 per cent this year.

"So far, we have no absolute solution to cope with this high inflation. What we have done is to solve the problem point by point," he said.

Tos Chirathivat, CEO of Central Retail Corp, said the current inflation rate was quite acceptable. "My feeling is that inflation is better than deflation," he said. Thailand had let its currency depreciate in 1997 and since then, inflation has been very low and everything was under the control of the government. "I agree with the price increases of agricultural products, particularly rice, as they in turn will lead to higher income for farmers," he said. "Individual farmers, however, should take full advantage of the rising prices of agricultural goods," he added.

Belt-tightening by middle-class consumers hammered by red-hot inflation has created winners and losers among firms catering to them.

"I'll be quite satisfied if we can achieve growth of 5 or 6 per cent this year," said Boonsithi Chokwatana, chairman of Saha Group, the country's leading manufacturing and trading conglomerate. His target is in line with the sharp drop of more than 10 per cent in sales of branded apparel and footwear. He said mismanagement by the government in trying to push up the interest rate to counter inflation would severely erode the purchasing power of consumers.

The baht's appreciation, on the other hand, would destroy exports and crush the incomes of people, particularly among the grass roots, he said.

- The Nation

[sriracha john]

more musings from the doctor in charge of the ailing economy...

DPM Surapong says inflation rate this year will not be double-digit

The Deputy Prime Minister and Finance Minister, Md. Surapong Suebwonglee, says the inflation rate last month went up 8.9 percent due to the global oil price hikes. However, he says this year's rate will not be a double-digit figure.

Md. Surapong says the inflation rate rose as projected because the global oil prices would likely increase within the range of 150 to 170 US dollars. Thus, it would be difficult for investors to speculate for benefits. However, he expresses confidence that the inflation rate for this year will be a double-digit figure, as many are concerned.

The Deputy Prime Minister and Finance Minister, however, says the inflation rate and the oil price crisis will cause the cost of living to go higher.

- ThaiNews

[sriracha john]

and praises for the Thai "team" that is working so smoothly that there have been no appreciable changes to people's lives...

Finance minister confident inflation won't hit double digits

BANGKOK, July 3 (TNA) – Finance and Deputy Prime Minister Surapong Suebwonglee on Wednesday again voiced confidence the country's inflation rate would not hit the double-digit level as many fear, as oil prices are unlikely to rise considerably from the current level.

Thailand's consumer price index (CPI) in June this year rose 1.2 per cent from May but soared 8.9 per cent from 2007. Core inflation for June rose 0.9 per cent from May but was up 3.6 per cent from last year. Core inflation during the first half of 2008 advanced 2.2 per cent from the same period of last year due to higher prices of goods, prepared food, construction materials and bus fares.

The finance minister conceded that the surge in the general inflation rate in June to the highest level in almost a decade stemmed from the continued increase in oil prices, and that the latest inflation figure is relatively quite high because the base figure last year was low.

However, Surapong said he believed oil prices will not continue their upward surge to touch US$170 per barrel as many are now expecting. Rather, they will probably move in a range of $130-140 per barrel because speculation in the fuel prices by hedge funds appeared to begin easing.

Given these factors, the finance minister said he was confident that the inflation rate would neither increase significantly nor reach the double-digit level as many worried.

Regarding news reports that Prime Minister Samak Sundaravej had approached former deputy prime minister Virabongsa Ramangura to join the economic team, he said the premier had not yet made a clear remark about the cabinet reshuffle.

Still, he affirmed the current economic team had worked together smoothly to address the country's economic woes although the results of its efforts to cope with the problem were rather limited because there were many obstacles.

[Old Man River]

and praises for the Thai "team" that is working so smoothly that there have been no appreciable changes to people's lives...

Finance minister confident inflation won't hit double digits

BANGKOK, July 3 (TNA) – Finance and Deputy Prime Minister Surapong Suebwonglee on Wednesday again voiced confidence the country's inflation rate would not hit the double-digit level as many fear, as oil prices are unlikely to rise considerably from the current level.

Regarding news reports that Prime Minister Samak Sundaravej had approached former deputy prime minister Virabongsa Ramangura to join the economic team, he said the premier had not yet made a clear remark about the cabinet reshuffle.

Virabongsa has been recently quoted saying that inflation would hit double figures. If Virabongsa joins this government, he would have to forget everything he knows about economics to fit in. Will he be willing to do this?

[ourmanflint]

don't worry... none of this will affect Thailands economy! I have it on very good authority from the members of TV here....

[sriracha john]

Thai shares close lower on inflation fears

BANGKOK - Thai shares closed lower on Wednesday amid growing concern over rising inflation. Banking and property stocks led the decline, while volatile oil prices and worries about political instability added to the negative sentiment in the market. The Stock Exchange of Thailand (SET) composite index lost 8.58 points or 1.12 percent to close at 760.01 points.

yet another huge drop in the SET today...

The Stock Exchange of Thailand fell 2.35 per cent Thursday. The SET index ended at 742.15, down 17.86 points.

[Priceless]

more musings from the doctor in charge of the ailing economy...

DPM Surapong says inflation rate this year will not be double-digit

The Deputy Prime Minister and Finance Minister, Md. Surapong Suebwonglee, says the inflation rate last month went up 8.9 percent due to the global oil price hikes. However, he says this year's rate will not be a double-digit figure.

Md. Surapong says the inflation rate rose as projected because the global oil prices would likely increase within the range of 150 to 170 US dollars. Thus, it would be difficult for investors to speculate for benefits. However, he expresses confidence that the inflation rate for this year will be a double-digit figure, as many are concerned.

The Deputy Prime Minister and Finance Minister, however, says the inflation rate and the oil price crisis will cause the cost of living to go higher.

- ThaiNews

WOW! With that insight it seems clear that the man is wasting his time here, he should be a professor at Harvard Business School or some place like that

/ Priceless

[frankman]

Time yo buy some glod, I guess.

[sriracha john]

Government insists it can counter inflation

The government is working to counter possible stagflation - deflation while prices rise - , Finance and Deputy Prime Minister Surapong Suebwonglee said Saturday.

He said the government has been seeking measures to prevent and rectify problems of deflation and inflation, so they don't happen simultaneously.

He said authorities are concerned about a possible tight money situation between now and the end of the year, which could cause problems for industrial and financial systems, Surapong said he is optimistic that if the government can tackle inflation effectively, liquidity could improve.

He did not say what the government is doing to counter inflation.

Banks currenlty have liquidity problems, Surapong said, but they are still able to mobilise deposits.

Meanwhile, Kasikorn Bank president Prasarn Trairatvorakul contradicted economists who fear liquidity problems. He said there may be a short-term problem in some industrial enterprises if banks reduce credit terms or debt repayment periods.

But commercial banks have developed lending problem and risk prevention systems, Mr Prasarn said. They should be able to attract deposits from the public. He sees a major problem in that government has so far failed to absorb excess liquidity for use in spending on public utilities.

Lending by commercial banks during the second half of 2008 may slow, but it would still be higher than last year because of continued private investment, Mr Prasarn added.

- TNA

[cclub75]

He said the government has been seeking measures to prevent and rectify problems of deflation and inflation, so they don't happen simultaneously.

It's proven that to have a sharp inflation followed by a sharp deflation is much better than to have both simultaneously.

He did not say what the government is doing to counter inflation.

Probably because he... doesn't know himself. Surapong is a sad clown.

I mean, we are laughing at Paulson ("we are committed to a strong dollar policy") and at Bernanke ("I'm going to think about increasing interest rates, maybe perhaps soon later")... so what could we do with... Surapong ?

Suicide... ?

Cheap 5 THB and 2 cents spin... this all what they have left under christmas tree... It's pathetic.

Edited July 12, 2008 by cclub75