Thai Inflation Picks Up In August

[webfact]

Thai inflation picks up in August

BANGKOK, September 1, 2011 (AFP) - Inflation in Thailand accelerated more than expected in August, despite a series of interest rate hikes by the central bank aimed at easing price pressures, government data showed Thursday.

Inflation rose to 4.29 percent in August year-on-year, up from 4.08 percent in July, according to the Commerce Ministry.

Month-on-month prices gained 0.43 percent in August, led by the food and energy sectors.

Thailand's central bank last week raised its key interest rate for the sixth time this year, to 3.50 percent -- the highest level in about three years -- saying inflation was a bigger threat than slowing global economic growth.

Thailand has lifted its key lending rate by 225 basis points since July 2010 in an attempt to tame inflation.

The Bank of Thailand has warned that the new government's populist policies, such as a higher minimum wage and increased rice prices for farmers, are likely to fuel cost pressures.

At the same time Yanyong Phuangrach, permanent secretary at the Commerce Ministry, said inflation was expected to ease back below four percent in September because of falling oil prices.

The ministry expects an inflation rate of between 3.2 and 3.7 percent for the whole of 2011.

Government data showed last week that the Thai economy contracted 0.2 percent in the second quarter as supply shortages caused by Japan's massive earthquake led to a sharp slowdown in exports.

-- (c) Copyright AFP 2011-09-01

[Buchholz]

The Bank of Thailand has warned that the new government's populist policies, such as a higher minimum wage and increased rice prices for farmers, are likely to fuel cost pressures.

[webfact]

Inflation rises to 4.29% in August

BANGKOK, Sept 1 – Thailand’s Consumer Price Index (CPI)--the inflation rate—rose to 113.23 per cent in August, a 4.29 per cent increase year-on-year, and the highest in 35 months, Yanyong Puangrach, Permanent Secretary for Commerce announced on Thursday.

He said the increase is deemed appropriate for the current economic conditions.

The rise in the inflation rate resulted from increased prices for food and beverages of 8.43 per cent.

The price index of rice, starch, and flour products rose 1.93 per cent, meats by 13.76 per cent, and eggs and dairy products by 4.95 per cent. Pork in August remained high at 150-160 baht per kilogramme but dropped slightly at the month end.

The CPI in the first eight months was up 3.72 per cent, compared to the same period last year.

The permanent secretary for commerce is confident that the inflation rate for the whole year could be within the range of 3.2-3.7 per cent as projected due to the suspension of contributions to the State Oil Fund which will help ease cost of living.

Although the cuts in fuel prices have yet to make significant change in the price of consumer goods, but it helped reduce the cost of living for transport, which will contribute to a last quarter drop in the inflation rate by 0.9 per cent. It is projected that the fourth quarter to stay around 3.6 per cent on average.

Regarding the government’s policy to raise the daily minimum wage to 300 baht, it will in theory not impact inflation because it will not cause much more spending by the public. One per cent wage raise will affect inflation by 0.08 per cent in one year.

In addition, the rice mortgage scheme will slightly affect inflation. If rice prices edge up by one per cent, it will result in an increase of inflation by only 0.02 per cent but if rice prices rise by 50 per cent, inflation rate will move up by about one per cent.

However, if domestic rice prices increase, the government is ready to provide bagged rice at lower prices than the market price to the public under the “blue flag” project and will strictly control the capital cost of rice production.

High rice prices will cause bagged rice prices from the new crop season to rise. Bagged rice sold in the market currently is from old stocks with a lower capital cost.

Amid concern that Thailand’s rice mortgages will lead to higher rice prices in the global market and will affect inflation in trade partner countries, the permanent secretary for commerce asserted that overall rice prices will not increase considerably and it will have only a slight impact on inflation. He said it is unfair that farmers earn less income to export rice at low prices to rich countries. (MCOT online news)

-- TNA 2011-09-01

[givenall]

There are many ways to buy a seat in parliament orgovernment is to give away money to voters. It is even simpler when the moneyis not theirs to give away

[TAWP]

Inflation is the hidden tax on the poor.

Congratulations.

[Misterwhisper]

"Inflation accelerated more than expected in August"? Why "unexpected"? A new populist government that will cost this country quite a few safely stored-away shirts and a recent forced decrease in fuel prices, and August inflation "accelerated unexpectedly"? Just wait and see. There'll be more "unexpected inflation" all too soon, I fear.

[SICHONSTEVE]

"Inflation accelerated more than expected in August"? Why "unexpected"? A new populist government that will cost this country quite a few safely stored-away shirts and a recent forced decrease in fuel prices, and August inflation "accelerated unexpectedly"? Just wait and see. There'll be more "unexpected inflation" all too soon, I fear.

When will the PTP apologists and defenders stand up and admit that they were wrong to back Yingluck and her "disaster party". They do not understand or know what they are doing. To put your faith in a bunch of imbeciles to run the economy and form the direction of Thailand's future is sheer lunacy!!!!.

In a time of world economic turmoil you need strong leadership and governance - what do get with this cluless bunch of morons??? neither, the sooner they are replaced (by whatever method appropriate for doing this) the better :jap:.

[vicco]

"Inflation accelerated more than expected in August"? Why "unexpected"? A new populist government that will cost this country quite a few safely stored-away shirts and a recent forced decrease in fuel prices, and August inflation "accelerated unexpectedly"? Just wait and see. There'll be more "unexpected inflation" all too soon, I fear.

When will the PTP apologists and defenders stand up and admit that they were wrong to back Yingluck and her "disaster party". They do not understand or know what they are doing. To put your faith in a bunch of imbeciles to run the economy and form the direction of Thailand's future is sheer lunacy!!!!.

In a time of world economic turmoil you need strong leadership and governance - what do get with this cluless bunch of morons??? neither, the sooner they are replaced (by whatever method appropriate for doing this) the better :jap:.

Thats the spirit. Lets have another coup....unelected puppet governments are so much better, especially when they operate under the direct control of the military and shoot any serious opponents. Strong leadership and governance...that's the ticket......