November inflation in Thailand dips to five-year low of 1.26 perent

[webfact]

November inflation dips to five-year low of 1.26%
Petchanet Pratruangkrai
The Nation

CPI drops 0.12percent from October in sixth decline in a row; deflation ruled out

BANGKOK: -- The Consumer Price Index rose 1.26 per cent in November, the smallest expansion in five years, according to official figures revealed by the Commerce Ministry yesterday.

The CPI also dropped 0.12 per cent from October, the sixth consecutive monthly decline.

For the 11-month period, the CPI grew 2.02 per cent year on year. The ministry expects inflation in the fourth quarter to be 1.6 per cent, and 1.8 per cent for the second half.

Index still increasing

Amparwon Pichalai, deputy permanent secretary of the ministry, said there was no fear of deflation, since the index was still increasing, albeit slowly.

Among the ministry's CPI basket of 450 items, prices of 197 products increased in November, while 157 remained unchanged and 96 decreased from the previous month.

With a positive outlook for next year assuming low fuel prices and stable goods prices, the ministry is projecting inflation in the range of 1.8-2.5 per cent, compared with this year's 2-2.8 per cent.

For 2015, it projects growth in gross domestic product at 4-5 per cent, the average Dubai oil price at US$90-110 per barrel, an exchange rate in the range of Bt31-34 against the US dollar, and the government maintaining price freezes and other cost-of-living relief measures.

Core inflation in November, which excludes volatile fuel and food prices, was 1.60 per cent year on year, down 0.11 percentage point from October. Core inflation in the first 11 months was 1.57 per cent, well within the Bank of Thailand's projection of 0.5-3 per cent for the full year.

Gundy Cahyadi, a DBS Bank economist, commented that with inflation at a five-year low, any interest-rate hike by the Bank of Thailand looked to be some distance away for now. There is a chance that the BOT may even ponder whether a rate cut will be beneficial at this stage.

Rate cut unnecessary

"But as we have constantly pointed out, any rate cut at this stage is unlikely to prove significant in boosting growth. The recovery in consumption growth takes time to be realised and besides, the government is still set to accelerate its projects in early 2015."

Source: http://www.nationmultimedia.com/business/November-inflation-dips-to-five-year-low-of-1-26-30248925.html


-- The Nation 2014-12-02

[terryp]

...speak to any thai and they will tell you straight, many can no longer afford to buy meat etc at the local markets

Among the ministry's CPI basket of 450 items, prices of 197 products increased in November, while 157 remained unchanged and 96 decreased from the previous month.

I bet that includes all the items manufactures are constantly told NOT to increase the price of

thailand is going to feel pain in the coming months and the poor will be the ones crushed again...how about a vat increase just to help things along

[Suriya4]

Thank You the great leader. Since You took over, inflation is lowest in history. Ie thai people has the greatest buying power. Thank You 3 times.

[NongKhaiKid]

It's only the 2nd of December yet a figure for November is available !

I suppose that, like Chinese elections, it helps to know the result in advance.

[rickirs]

An inflation rate of 2%-3% per annum is good for an economy.

Low inflation can damage the economy:

- businesses are motivated to freeze worker pay

- businesses are motivated to cut worker pay cut or lay off workers to reduce operating costs

- banks are encouraged more household borrowing

- manufacturers have finished products that become unprofitable

- consumer confidence drops

- investor confidence drops

- lowers demand for government bonds used to provide stimulus spending

Very low inflation and low GDP growth are not cures for a stagnant or failing economy.

[wabothai]

L O S

[elgordo38]

Thailand has started to use the same inflation ruler that has been used in Western countries for over a decade. Real inflation is running over 5% every where in the world. When I first retired they were using an honest way of figuring out the cost of living. Since then they have tossed this out that out of the cost of living basket. The obvious benefit is low inflation means less pension for us poor retired folk. Over time it also drives down interest rates and hey who is the biggest borrower in the world after their big business buddies. Right you got a bingo.