Thailand's Inflation Rate For 1st Half Of The Year Estimated At 5.7%

[Jai Dee]

Thailand's inflation rate for 1st half of the year estimated at 5.7%

The director of the Bureau of Trade and Economic Indices expects inflation rates in the first half of the year to be at about 5.7%, due mainly to rising standards of living, oil prices, and food prices.

Mrs. Natheetip TongKhaoOrne (นทีทิพย์ ทองเขาอ่อน), director of the Bureau of Trade and Economic Indices, of the ministry of finance, stated that the inflation rate trend of the first half of this year will be at about 5.7%, higher than in the same period last year by 2.4%.

Influential factors in rising inflation rates are the increase in oil and food prices, and in the living standards of people. Mrs. Natheetip expects the inflation will be reduced by the government's energy conservation policy, which will emphasize alternative fuel usage in the form of gasohol.

In addition, the director stated that the annual inflation rate of 2006 will not exceed 4.5%.

Source: Thai National News Bureau Public Relations Department - 28 April 2006

[rishi]

Thailand's inflation rate for 1st half of the year estimated at 5.7%

...

In addition, the director stated that the annual inflation rate of 2006 will not exceed 4.5%.

... so we can expect oil prices and/or food prices and/or living standards to decrease in the second half of this year?

[Mighty Mouse]

Does the high cost of bar fines have anything to do with this?

[Heng]

Thailand's inflation rate for 1st half of the year estimated at 5.7%

...

In addition, the director stated that the annual inflation rate of 2006 will not exceed 4.5%.

... so we can expect oil prices and/or food prices and/or living standards to decrease in the second half of this year?

Sure, if you're not making at least 6% return on your investments/business, otherwise you probably won't even notice.

[GuestHouse]

For the number to have any real meaning you need to know the basis of the calculation.

Given that foreigners have different spending patterns that Thais it follows that the inflation rate effecting foreigners is different than that effecting Thais.

As discussed in an earlier thread I believe the actual inflation rate for foreigners to be around 7.5%

An example of a significant inflation figure is the cost of building and building materials. If, like me, you have bought your building plot, but have yet to build your house in Thailand, you are facing an increase in the cost of around 10%.

Add to that the gains made by the Baht against western currencies and the picture is not a happy one. I figure the cost of the house we want to build has risen around 20% this past year. While I hedge that against the fact we bought the land when the Baht was cheap, it nevertheless is a significant cost increase.

Worse still for people living on a fixed income from overseas.

[rishi]

Thailand's inflation rate for 1st half of the year estimated at 5.7%

...

In addition, the director stated that the annual inflation rate of 2006 will not exceed 4.5%.

... so we can expect oil prices and/or food prices and/or living standards to decrease in the second half of this year?

Sure, if you're not making at least 6% return on your investments/business, otherwise you probably won't even notice.

You mean the return has to increase 6% (rather than be 6%), right ? Very well, I'll raise my charges 6% to comply with the situation - inflation is inflation.

[RAZZELL]

Does the high cost of bar fines have anything to do with this?

[cclub75]

so we can expect oil prices and/or food prices and/or living standards to decrease in the second half of this year?

Of course !

What do you think ? The "director" is talking to you. Repeat after him : "in-fla-tion it's a bad word".

So for the second semester : inflation will go... down. But wait, an "inflation" that goes down, is it a "deflation" ?

Oh my... my head is hurting.

So back to the "director" : yes indeed the gasoline will return to 15 THB per liter. Are you happy now ?

[however, beware of the errors of translation. It's very common, especially with "directors"]

[cclub75]

Given that foreigners have different spending patterns that Thais it follows that the inflation rate effecting foreigners is different than that effecting Thais.

Ah ! At last, some common sense. Bravo.

Before to be a general concept, inflation is something... personal, linked to consumption. That affect people in many different ways.

This idea is appropriate in western countries as well.

This is why "index" calculated (cheated) by governments are meaningless.

Let's take 2 examples:

-Mister owns and drives a car

-Mister is building a new house (with a loan)

-Mister buys secretely some gold to offer to his mistress

-Mister likes to make trips by air plane.

-Madame uses BTS for transportation

-Madame lives in her family's house : no rent, no loan

-Madame doesn't buy gold (but likes to receive some as gift)

-Madame prefers to take the train (she feels more secure) to go upcountry

Mister is going to be hamered by the prices of gasoline, commodities and building materials. And by interest rates (because he took a loan). Obviously "inflation" will be very high for him.

[LaoPo]

Thailand's inflation rate for 1st half of the year estimated at 5.7%

The director of the Bureau of Trade and Economic Indices expects inflation rates in the first half of the year to be at about 5.7%, due mainly to rising standards of living, oil prices, and food prices.

Mrs. Natheetip TongKhaoOrne (นทีทิพย์ ทองเขาอ่อน), director of the Bureau of Trade and Economic Indices, of the ministry of finance, stated that the inflation rate trend of the first half of this year will be at about 5.7%, higher than in the same period last year by 2.4%.

Influential factors in rising inflation rates are the increase in oil and food prices, and in the living standards of people. Mrs. Natheetip expects the inflation will be reduced by the government's energy conservation policy, which will emphasize alternative fuel usage in the form of gasohol.

In addition, the director stated that the annual inflation rate of 2006 will not exceed 4.5%.

Source: Thai National News Bureau Public Relations Department - 28 April 2006

Quite shocking...

Interested to see how they will bring down the inflation from 5.7% to 4.5% for the whole year 2006, especially with the rising Baht....

LaoPo

[PeaceBlondie]

Let me guess, keeping in mind that this is an ESTIMATE of a Thai statistic: The first half of the year will see the cost of living increase at an ANNUALIZED RATE of 5.7%, which is 2.9%. Then, it will continue rising, but not quite as quickly, so that the final rate for 2006 will only be 4.5%.

That's not true, of course. To be 4.5% for the year (leaving out a slight compounding effect), the second half of the year would only be 1.6%. Not likely, unless the fuel price shock only affects the first six months.

It means nothing. However, fuel prices will surely do their damage.

I like that 7.5% estimate for farangs in the real world of LOS. Let's see, the USDollar has already fallen about 7% against the baht, so that's about 15% total increase....ouch!

[rishi]

That's not true, of course. To be 4.5% for the year (leaving out a slight compounding effect), the second half of the year would only be 1.6%. Not likely, unless the fuel price shock only affects the first six months.

Although I'm not an economical expert, I sure do agree with your basic assumptions, PeaceBlondie... The one and only beneficial solution to the current despair evoked by the fex -rate of usd/eu/pounds/dkr vs. baht is to: GET OUT OF HERE OR BUY THAI REAL-ESTATE... just my two dimes.

[cclub75]

That's not true, of course. To be 4.5% for the year (leaving out a slight compounding effect), the second half of the year would only be 1.6%. Not likely, unless the fuel price shock only affects the first six months.

Exactly.

Furthermore, I think it will be even worse than the first semester.

Many businesses have waited for a long time to increase their prices. Pressure on margins are becoming too strong.

Oil will be a good reason and a good... excuse too (like "why do you increase the price of som tam ? ! Because of gasoline").

At one point (soon i think), it would not be possible anymore to wait or postpone. You have to offset your costs.

So if oil continue to rise (or even stay at current level), then I really think we will have large prices hikes.

[rishi]

Many businesses have waited for a long time to increase their prices. Pressure on margins are becoming too strong.

That ain't even a lie. From Monday on, my customers'll have to deal with a price-hike - long time awaiting the proper time.... The proper time is now because our residential wanna-be-around's all are gone back to their homecountry with a promize to be back, next year (preferably with a bit more hard currency, than this year).

[Meerkat]

Quite shocking...

Interested to see how they will bring down the inflation from 5.7% to 4.5% for the whole year 2006, especially with the rising Baht....

LaoPo

The premise that the inflation rate should decrease towards the end of the year would be mostly because the major oil rises of last year will be rolling off the numbers. As the "base" will be higher towards the end of the year, the rate of change from that base will appear lower.

The strengthening of the THB will have a deflationary rather than an inflationary effect.

Firstly, it means that Thai exports become more expensive abroad, leading to a drop in export demand thus reducing spending-power in Thailand.

Secondly, foreign imports to Thailand become cheaper - that USD100 gizmo you wanted to buy from the US at 40 THB to the USD would only cost you THB 3800 now rather than 4000. You would be "importing deflation".

[simcity]

i find everything going up , everytime i get my dog's food ( oversea import ) the price go like 620 - 640 - 660 - 720 - 760

what surprise me is the baht is quiet strong , how came so much rise the last three months ?