Thai Finance Minister not concerned over negative inflation

[webfact]

Finance minister not concerned over negative inflation

BANGKOK, 2 February 2015 (NNT) - Finance Minister Sommai Phasi has reported that January’s negative inflation rate has not yet affected the overall Thai economy, saying the negative inflation rate was caused by lower commodity and oil prices.

The minister said the negative inflation rate would not lead to a deflation and explained that it was caused by the government’s measures to bring down high commodity prices and global oil price which had significantly decreased. The negative inflation in January 2015 was short-term and impermanent, the minister added.

The Ministry of Finance is urgently finding measures to help farmers and low-income people and will submit them to the Cabinet for consideration late this month. Mr Sommai confirmed the measures would not be populist.


-- NNT 2015-02-02

[bangkapi]

If "negative inflation" is not deflation, I'd like to know the difference.

[rubl]

Newsflashy - newsflashy - newsflashy

In a new poll at least 94.54% of respondents agree with the MoF. They are also not worried about deflation. Furthermore 45.13% wonder if deflation means their money will finally stretch to the end-of-the-month. A mere 21.99% were satisfied, but honesty had the poll organisation admit those probably didn't understand the question.

tongue-in-cheeky

[surangw]

anything like the ball pressure issue before the super bowl b.s. ?

[Bluespunk]

"Finance Minister Sommai Phasi has reported that January’s negative inflation rate has not yet affected the overall Thai economy"

Yet being the key word.

[tullynagardy]

"In other news Finance Sommai Phasi has admitted to being so incompetent and unqualified for his role that he doesn`t know what deflation is. He quickly followed his admission by reminding everyone he, like the dear leader, was returning happiness to the people and pointed to a recent poll by the University of Hi-so that showed public approval had now surpassed 100%"

[Gweiloman]

Let's see - negative inflation means that things will be cheaper tomorrow than today. Hey, that's great, that means we will have more money in our pockets tomorrow than today, compared to previous times.

That's what I call "returning happiness to the people".

Problem is that if what I wanted to buy today will be cheaper tomorrow, then I will wait till tomorrow. Then what tomorrow comes, the thing that I wanted to buy will be cheaper the day after. So, I'll wait till the day after. Reminds me of signs in bars that says "Free Beer Tomorrow".

On a completely unrelated topic, soldiers knows a lot about fighting wars. They don't know that much about economics.

[Thai at Heart]

Let's see - negative inflation means that things will be cheaper tomorrow than today. Hey, that's great, that means we will have more money in our pockets tomorrow than today, compared to previous times.

That's what I call "returning happiness to the people".

Problem is that if what I wanted to buy today will be cheaper tomorrow, then I will wait till tomorrow. Then what tomorrow comes, the thing that I wanted to buy will be cheaper the day after. So, I'll wait till the day after. Reminds me of signs in bars that says "Free Beer Tomorrow".

On a completely unrelated topic, soldiers knows a lot about fighting wars. They don't know that much about economics.

Problem is, this idiot doesn't know what he's talking about

[surangw]

political double speak ( and not at its finest)

[Cake Monster]

With many Finance Ministers in the developed world, along with the IMF, World Bank, worried the hell about " negative / deflation " ) within their economies, Why is Thailand so different ?.

Or is this just a statement from a quango that has a poor understanding of economics ?

[shirtless]

Of course he will not be worried , he has never had to worry about anything as it all paid for by the taxpayer,

[BudRight]

Surely he means the opposite of negative deflation.

[konying]

Of course he is not concerned, he does not know the meaning of it

Edited February 3, 2015 by konying

[cloudhopper]

All monetary systems in use today use credit creation (AKA debt) to create spendable money far more than they "print" it into existence. Unfortunately credit/debt-based monetary systems must grow at an exponential rate or they will collapse. All central banks fear the inevitable deflationary burst.

[h90]

If "negative inflation" is not deflation, I'd like to know the difference.

I think what he meant, but maybe lost in translation, that it is not a real deflation, where things get cheaper. It is just that the oil price goes down so much in a short time that the numbers shows a deflation. But it isn't a real one.

[h90]

All monetary systems in use today use credit creation (AKA debt) to create spendable money far more than they "print" it into existence. Unfortunately credit/debt-based monetary systems must grow at an exponential rate or they will collapse. All central banks fear the inevitable deflationary burst.

And do everything to let it burst a year later with double the problems...

[GarryP]

I know a number of Thai people who are members of the blue collar/labour group and not one of them says that things are improving. In fact for most of them it is the opposite. One woman I know quit her factory job two years ago to do sewing repairs at home and also run a mini food shop. For the first year everything was good and she was earning more money. However, in the past 12 months things have been getting worse and she is talking about going back to work in a factory if she can find a job. Her husband has a pick-up truck hire and signwriting business, and he has had barely any work in months. Other Thai acquiantances are suffering too, many no longer having the opportunity to do OT, which was necessary to carry them through to the end of each month. So while the people in power say everything is rosey and the economy is improving, they are actually feeding the public with bullshit.

Then you have the TAT saying that a few bombs won't hurt tourisim and you know you are dealing with people from a different plannet.

[trogers]

Let's see - negative inflation means that things will be cheaper tomorrow than today. Hey, that's great, that means we will have more money in our pockets tomorrow than today, compared to previous times.

That's what I call "returning happiness to the people".

Problem is that if what I wanted to buy today will be cheaper tomorrow, then I will wait till tomorrow. Then what tomorrow comes, the thing that I wanted to buy will be cheaper the day after. So, I'll wait till the day after. Reminds me of signs in bars that says "Free Beer Tomorrow".

On a completely unrelated topic, soldiers knows a lot about fighting wars. They don't know that much about economics.

Try to delay buying your meals or toilet papers and such...

Deflation generally affects demand for large ticket items such as houses and cars, which is good in bringing down household debts.

Bad news for banks and producers of such goods though.

[wow64]

Its on deflation if it doesn't put a smile on faces.

[lucky11]

If "negative inflation" is not deflation, I'd like to know the difference.

Quote from a Eurozone economist - implying that what the Thai Finance Minister is saying is absolutely correct (for the reasons he gave).

An important Rubicon was crossed this morning as it was finally confirmed that the Eurozone as a bloc has slipped into negative inflation – the flash estimate for annual HICP inflation came in at -0.2%. (I’ve used negative inflation rather than deflation, since technically there are definitional differences).

Many people have warned of the risks of deflationary spiral in the Eurozone, however, I do not believe such a phenomenon is particularly likely for a number of reasons, even now.

Transitory impact of energy prices:

The drop to negative inflation had largely been expected due to the huge movements in the oil price. Indeed, the annual rate of change in energy prices fell to -6.3% from -2.6% in November. In fact, core inflation actually increased to 0.8% from 0.7%, though of course it remains some way below target and has been on a long term downward trend. Once energy prices recover the Eurozone will likely push back into positive inflation.

[rickirs]

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Let's see - negative inflation means that things will be cheaper tomorrow than today. Hey, that's great, that means we will have more money in our pockets tomorrow than today, compared to previous times.

That's what I call "returning happiness to the people".

Problem is that if what I wanted to buy today will be cheaper tomorrow, then I will wait till tomorrow. Then what tomorrow comes, the thing that I wanted to buy will be cheaper the day after. So, I'll wait till the day after. Reminds me of signs in bars that says "Free Beer Tomorrow".

On a completely unrelated topic, soldiers knows a lot about fighting wars. They don't know that much about economics.

"soldiers knows a lot about fighting wars. They don't know that much about economics."

Now there you are wrong. They were able to kill the economy as well as any person.

[Nemesis7]

Since when they care about anything but money and foreigners money...????

[rickirs]

"The negative inflation in January 2015 was short-term and impermanent,"

All the more urgency for the government to pump capital into the economy in the form of infrastruture projects NOW! Thailand needs economic GDP growth after a staganting 2014 economy and negative inflation discourages private capital investment. Businesses lose revenues, begin cutting employment or just close, and wages collapse. It is alarming that the Finaince Minister is so casual about January negative inflation and its implications on the economy for the remainder of the year.

Don Nakornthab, director of the Bank of Thailand Macroeconomic Policy Office - "Recovery of domestic consumption and private investment in Thailand is still slow as the private sector is still waiting for global economic recovery and massive government investment on basic infrastructure projects." 2015-02-02

Chantana Sukumanont, an adviser to Siam City Cement - "If there's no ground-breaking [on government investment projects], I do not believe in anything. One recommendation I have for the government is to 'just do it'. There's enough talk already," The Nation 2015-01-30

Kritsada Jinavijarana, the director-general of the Fiscal Policy Office predicts that the baht will fall to 33.06 baht per USD (2015-01-30). I predicted last month 35 baht per USD before summer 2015. Either case bodes ill for Thailand.

[Robby nz]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

Let's see - negative inflation means that things will be cheaper tomorrow than today. Hey, that's great, that means we will have more money in our pockets tomorrow than today, compared to previous times.

That's what I call "returning happiness to the people".

Problem is that if what I wanted to buy today will be cheaper tomorrow, then I will wait till tomorrow. Then what tomorrow comes, the thing that I wanted to buy will be cheaper the day after. So, I'll wait till the day after. Reminds me of signs in bars that says "Free Beer Tomorrow".

On a completely unrelated topic, soldiers knows a lot about fighting wars. They don't know that much about economics.

"soldiers knows a lot about fighting wars. They don't know that much about economics."

Now there you are wrong. They were able to kill the economy as well as any person.

Who has killed the economy ?

Wouldn't have been your beloved PT government would it, who left the country in the deepest debt it has ever been in.

And the average debt per head is also the highest in Thai history.

The rice market is only just starting to get back on its feet after the disastrous pledging scheme which has left warehouses full of rice that will only fetch a fraction of the price they should have while the cost of storing that rice will continue.

They managed to get corruption up to the highest level ever, the true extent of which is still coming to light with continuing arrests.

Have a look at the report in the finance section of todays BKK post ; 'baht rallies on inflows'. to get an outside view from world economists.

This is one month of the year and easily explained by the drop in fuel prices, what would you want them to do, keep fuel prices high and let the big companies reap the profits just so it can look like the economy is growing ?

This is not your minister of white lies and I will guarantee he knows more about finance than you.

[trogers]

"The negative inflation in January 2015 was short-term and impermanent,"

All the more urgency for the government to pump capital into the economy in the form of infrastruture projects NOW! Thailand needs economic GDP growth after a staganting 2014 economy and negative inflation discourages private capital investment. Businesses lose revenues, begin cutting employment or just close, and wages collapse. It is alarming that the Finaince Minister is so casual about January negative inflation and its implications on the economy for the remainder of the year.

Don Nakornthab, director of the Bank of Thailand Macroeconomic Policy Office - "Recovery of domestic consumption and private investment in Thailand is still slow as the private sector is still waiting for global economic recovery and massive government investment on basic infrastructure projects." 2015-02-02

Chantana Sukumanont, an adviser to Siam City Cement - "If there's no ground-breaking [on government investment projects], I do not believe in anything. One recommendation I have for the government is to 'just do it'. There's enough talk already," The Nation 2015-01-30

Kritsada Jinavijarana, the director-general of the Fiscal Policy Office predicts that the baht will fall to 33.06 baht per USD (2015-01-30). I predicted last month 35 baht per USD before summer 2015. Either case bodes ill for Thailand.

What massive basic infrastructure? Investment needs a study on risk and returns, or should Thailand follow China in the latter's investment strategies during 2008-2012?

And massive means EIA assessments and public hearings.

[heybruce]

"The minister said the negative inflation rate would not lead to a deflation and explained that it was caused by the government’s measures to bring down high commodity prices and global oil price which had significantly decreased."

The Thai government brought down commodity prices and global oil prices? I hope this statement was a poor translation, I'd hate to think the finance minister is that misinformed.

[Mickeem]

Well I'm not too concerned after the suprise of seeing that a small can of Chang at the local Tesco cost 32B today instead of the usual 35B

Still 2B more than a few months ago when it was 30B .. but hey bring on more 'negative inflation' it's not such a bad thing really ..

[Ricardo]

Not to worry, deflation is a foreign concept, so cannot possibly occur here in LOS, unless the farang tourists smuggle some in via Swampy !

[trogers]

If "negative inflation" is not deflation, I'd like to know the difference.

I think what he meant, but maybe lost in translation, that it is not a real deflation, where things get cheaper. It is just that the oil price goes down so much in a short time that the numbers shows a deflation. But it isn't a real one.

Visual explanation - price curve is still on the rise and not falling. But the whole price curve has been forced downwards due to a drastic fall in the price of oil.