Thai govt plans price controls

[webfact]

Price controls planned
Tinnakorn Chaowachuen
The Nation

Fear of 'stagflation' with consumption and investment slowing here and abroad

BANGKOK: -- Price controls are the focus of new government measures drawn up in light of slowing global growth, which has led to a decline in domestic consumption and investment.

After the workshop yesterday chaired by Premier Yingluck Shinawatra and economic ministers, the government announced six measures which deal mostly with the price of fresh and finished products.

Deputy Premier and Commerce Minister Niwatthumrong Boonsong-paisarn said that another workshop would be held next week to devise more moves, as the government fears stagflation - slow economic growth and a rise in prices.

The PM wanted a long-term solution to address product prices from "upstream to downstream", he said. These moves would strike a balance for sellers and buyers, at a time when consumers are tightening their belts as global economy slows.

Initial measures approved yesterday were:

1. Agriculture Ministry assigned to find ways to lower the cost of fertiliser and feed meal;

2. Commerce and Agriculture ministries to consider setting up regional distribution centres;

3. Agriculture Ministry to come up with efficient zoning strategies;

4. Ministries of Commerce, Finance and Agriculture to promote competition;

5. Energy Ministry to restructure energy prices for higher energy efficiency;

6. Finance Ministry, Bank of Thailand and the National Economic and Social Development Board to closely monitor domestic consumption and investment.

The Treasury Department was also assigned to provide space for distribution of "price-controlled" products.

A government source said that according to the NESDB report, inflation in the first half of this year stood at 2.7 per cent - the lowest in three years, but some products saw a rise in price. From Sept 2011, the fresh vegetable price index has risen by 26 per cent; fresh fruit prices by 16 per cent, finished food products by 5 per cent, electricity by 20 per cent, tap water by 12 per cent, and fuel by nearly 15 per cent.

The NESDB said there was no sign of a spike in inflation in the latter half, thanks mainly to stable oil prices as well as strict control on product price hikes. Economic growth in the second quarter may be lower than the first, because of a contraction

in private consumption (0.2 per cent in May) and investment (3.3 per cent in the same month). Delays in public investment could also affect the full-year growth forecast at 4.2-5.2 per cent, as this assumes disbursement of at least Bt67 billion of the Bt350-billion water-management budget and at least Bt10 billion from the Bt2 trillion infrastructure scheme.

While the water-management scheme awaits the completion of environmental and health impact assessments, only Bt6 billion is expected to be disbursed under the infrastructure scheme.

Several economic houses have downgraded growth projections for Thailand this year. On July 19, the Bank of Thailand is expected to revise its projection from 5.1 per cent, as the International Monetary Fund this week lowered its global growth forecast by 0.2 percentage points to 3.1 per cent, factoring in lower growth in emerging markets, particularly China.

While the IMF's new forecast for China was cut by 0.3 percentage points to 7.8 per cent against China's official target of 7.5 per cent, Chinese Finance Minister Lou Jiwei yesterday signalled the world's second-biggest economy may expand less than that and that growth as low as 6.5 per cent may be tolerable in the future.

At the US-China Strategic and Economic Dialogue in Washington, Lou said he was confident of achieving a 7 per cent rate this year. His comments suggest China is prepared to allow a further slowdown from a rate that's already at risk of falling to a 23-year low this year as Premier Li Keqiang focuses on policy changes to create more-sustainable expansion.

Yingluck, early yesterday, also attended a meeting of the international business committee. The Foreign Affairs Ministry was tasked to ensure Thailand ratifies the last three of nine ASEAN cross-border treaties signs before 2014, to promote Thai exports.

The committee was also asked to boost competitiveness, and to discuss this with the private sector. Commercial counsellors will also monitor trade barriers.


-- The Nation 2013-07-13

[NongKhaiKid]

In the 6 agreed measures the buzz words were out in force " assigned ", " come up with ", " promote ".

Hope they find new ones before next week's workshop.

One major event yesterday though, YL turned up.

[jaidam]

Is it just me or does this have shades of communism? Fixing prices all across the board, what next? Assigning occupations for every citizen?

This problem arose because of the govt meddling with the free market forces(wage hikes, megaspending, rice scheme etc) directly causing the inflation they are now moaning about. Thaivisa should be compulsory reading for govt ministers and staff, then they would have been forewarned of the inflationary nature of their harebrained policies.

[Soutpeel]

Is it just me or does this have shades of communism? Fixing prices all across the board, what next? Assigning occupations for every citizen?

This problem arose because of the govt meddling with the free market forces(wage hikes, megaspending, rice scheme etc) directly causing the inflation they are now moaning about. Thaivisa should be compulsory reading for govt ministers and staff, then they would have been forewarned of the inflationary nature of their harebrained policies.

This was the exact throught that crossed my mind as well...making the preparations for the return of "Chairman" Thaksin perhaps ?

[bangkokheat]

easy fix, stop lining your pockets, drop fuel and energy prices

[Ricardo]

We haven't seen this strategy for at least a year, have we ? Bring back Thaksin's 10-Baht-Meal carts !

Yay for Red Policy-Innovation !

But, hold on, fear of 'stagflation' would involve prices falling, wouldn't it ?

So PM-Yingluck & her government, having overseen some pretty hefty increases in the cost-of-living over the past couple of years, are now concerned to avoid or prevent falling-prices, which would help the overstressed poor ?

Perhaps one ought to say, 'Yay for Red Concern, for the Poor', instead !

[Hockeybik]

Let's see... we implement programs that have been tried... oh I don't know millions of times before... that have never, ever in the record of any economic interaction of human history worked... but this time... we are so f*&*ing brilliant... that WE will make it work this time.

The endless stream of morons that find their way into government is absolutely astonishing.

[KarenBravo]

Stagflation isn't just about prices falling. It is falling prices coupled with falling demand as consumers don't spend money today in the expectation that prices will fall further tomorrow.

Japan has been suffering this for two decades now.

[OzMick]

Stagflation isn't just about prices falling. It is falling prices coupled with falling demand as consumers don't spend money today in the expectation that prices will fall further tomorrow.

Japan has been suffering this for two decades now.

Consumers saving their money hoping for cheaper prices - I can't see that catching on in Thailand!

[Thai at Heart]

Is it just me or does this have shades of communism? Fixing prices all across the board, what next? Assigning occupations for every citizen?

This problem arose because of the govt meddling with the free market forces(wage hikes, megaspending, rice scheme etc) directly causing the inflation they are now moaning about. Thaivisa should be compulsory reading for govt ministers and staff, then they would have been forewarned of the inflationary nature of their harebrained policies.

I am not for communism, but the problem here is that they have actively created oligopoly and it hurts the price mechanism.

[Bob12345]

The PM wanted a long-term solution to address product prices from "upstream to downstream", he said. These moves would strike a balance for sellers and buyers, at a time when consumers are tightening their belts as global economy slows.

Thousands of years of economic theories and experience are being thrown out of the window because the Thai government finally cracked the problem and found out how to do this better than the market can. I am impressed and cannot wait till they will collect their "Nobel prize" for it.

[bangkokheat]

Is it just me or does this have shades of communism? Fixing prices all across the board, what next? Assigning occupations for every citizen?

This problem arose because of the govt meddling with the free market forces(wage hikes, megaspending, rice scheme etc) directly causing the inflation they are now moaning about. Thaivisa should be compulsory reading for govt ministers and staff, then they would have been forewarned of the inflationary nature of their harebrained policies.

I am not for communism, but the problem here is that they have actively created oligopoly and it hurts the price mechanism.

"oligopoly" where do you guys get these words, im flabbergasted

[drdoom6996]

In the 6 agreed measures the buzz words were out in force " assigned ", " come up with ", " promote ".

Hope they find new ones before next week's workshop.

One major event yesterday though, YL turned up.

I thought that meant to do nothing, as always.

[KarenBravo]

The PM wanted a long-term solution to address product prices from "upstream to downstream", he said. These moves would strike a balance for sellers and buyers, at a time when consumers are tightening their belts as global economy slows.

Thousands of years of economic theories and experience are being thrown out of the window because the Thai government finally cracked the problem and found out how to do this better than the market can. I am impressed and cannot wait till they will collect their "Nobel prize" for it.

The global economy is expanding and I think it always has, year on year. Individual countries is another matter.

[bigbamboo]

Is it just me or does this have shades of communism? Fixing prices all across the board, what next? Assigning occupations for every citizen?

This problem arose because of the govt meddling with the free market forces(wage hikes, megaspending, rice scheme etc) directly causing the inflation they are now moaning about. Thaivisa should be compulsory reading for govt ministers and staff, then they would have been forewarned of the inflationary nature of their harebrained policies.

This was the exact throught that crossed my mind as well...making the preparations for the return of "Chairman" Thaksin perhaps ?

What it definitely has is shades of panic among a government where no one really knows what they're doing..

Edited July 13, 2013 by bigbamboo

[Thai at Heart]

Is it just me or does this have shades of communism? Fixing prices all across the board, what next? Assigning occupations for every citizen?

This problem arose because of the govt meddling with the free market forces(wage hikes, megaspending, rice scheme etc) directly causing the inflation they are now moaning about. Thaivisa should be compulsory reading for govt ministers and staff, then they would have been forewarned of the inflationary nature of their harebrained policies.

I am not for communism, but the problem here is that they have actively created oligopoly and it hurts the price mechanism.

"oligopoly" where do you guys get these words, im flabbergasted

You don't think chicken, egg or rice supply is in the hands of an oligopoly.

Dictionaries are widely available in bookshops and online.

Edited July 13, 2013 by Thai at Heart

[GentlemanJim]

Welcome to communism. Another piece in the "How to instill a Cambodian style of Government in your Country' Jigsaw puzzle falls into place. The red apologists on here must be so happy.

Edited July 13, 2013 by GentlemanJim

[hansnl]

More and more one might see moves that were made in the past in Indonesia (Suharto family) and Phillipines (Marcos family).!

But what all this might have to do with communism escapes me.

This government mostly has right wing leanings.

What I see is a government tottering on the brink of destroying a country by means of impossible schemes to placate different groups.

But most of all themselves.

I guess many of the communism callers are from the US, a country notoriously unknowing in politics different from their own political system.

A country also, very well known for it's support of right wing dictators, wrong groups in the islam world, and so on.

What the Thai government is doing got nothing to do with communism, at all!

More with making a country a family business...............

Edited July 13, 2013 by hansnl

[hellodolly]

Can some one explain this to me

"A government source said that according to the NESDB report, inflation in the first half of this year stood at 2.7 per cent - the lowest in three years, but some products saw a rise in price. From Sept 2011, the fresh vegetable price index has risen by 26 per cent; fresh fruit prices by 16 per cent, finished food products by 5 per cent, electricity by 20 per cent, tap water by 12 per cent, and fuel by nearly 15 per cent."

If

"From Sept 2011, the fresh vegetable price index has risen by 26 per cent; fresh fruit prices by 16 per cent, finished food products by 5 per cent, electricity by 20 per cent, tap water by 12 per cent, and fuel by nearly 15 per cent."

is true what went down so far that the overall figure was only 2.7%

[Thai at Heart]

Can some one explain this to me

"A government source said that according to the NESDB report, inflation in the first half of this year stood at 2.7 per cent - the lowest in three years, but some products saw a rise in price. From Sept 2011, the fresh vegetable price index has risen by 26 per cent; fresh fruit prices by 16 per cent, finished food products by 5 per cent, electricity by 20 per cent, tap water by 12 per cent, and fuel by nearly 15 per cent."

If

"From Sept 2011, the fresh vegetable price index has risen by 26 per cent; fresh fruit prices by 16 per cent, finished food products by 5 per cent, electricity by 20 per cent, tap water by 12 per cent, and fuel by nearly 15 per cent."

is true what went down so far that the overall figure was only 2.7%

They obviously have a very very odd basket of goods.....

[MikeOboe57]

Can some one explain this to me

"A government source said that according to the NESDB report, inflation in the first half of this year stood at 2.7 per cent - the lowest in three years, but some products saw a rise in price. From Sept 2011, the fresh vegetable price index has risen by 26 per cent; fresh fruit prices by 16 per cent, finished food products by 5 per cent, electricity by 20 per cent, tap water by 12 per cent, and fuel by nearly 15 per cent."

If

"From Sept 2011, the fresh vegetable price index has risen by 26 per cent; fresh fruit prices by 16 per cent, finished food products by 5 per cent, electricity by 20 per cent, tap water by 12 per cent, and fuel by nearly 15 per cent."

is true what went down so far that the overall figure was only 2.7%

Bovine manure dropped sharply due to massive oversupply among decreasing demand.

[moe666]

It is to keep the masses happy by appearing to do something even if it is wrong. If I remember correctly Richard Nixon tried this in the 70s didn't work out well.