Negative inflation for four consecutive months

[Thaivisa News]

Bangkok: – The Commerce Ministry has insisted that Thailand has not been experiencing deflation despite negative inflation for four consecutive months.

Last month, the inflation rate dropped by 1.04 per cent in comparison to the same period last year, seen as a highest record for negative inflation in five years and seven months.

Somkiat Srirattanaphan, director of Trade Policy and Strategy Office, said Consumer’s Price Index rose 0.02 per cent last month in comparison to March.

The CPI change of less than one per cent is considered negative inflation.

The last month’s price change is attributed to seasonal fluctuation for the supplies of vegetables and fruits.

Prices for key vegetables like kale, cabbage, coriander, lime, spring onion have slightly risen. The costs for rent, cigarette, liquor, pork, orange and food delivery service have also gone up.

This year’s four-month inflation is at the average of 0.65 per cent.

Of the 450 essential items in the CPI survey, prices for 148 items have increased, 199 items unchanged and 103 items dropped.

The CPI for foods and non-alcoholic drinks rose by 0.60 per cent in comparison to last year.

Somkiat said the CPI computation was swayed by the seasonal fluctuation of food and the oil price.

Without food and oil factoring in the CPI, the country’s inflation rate is actually on the rise for more than one per cent and this is the reason why he rules out deflation, he said.

For the remaining of 2015, the country will likely overcome the negative inflation as the oil price is on the upward trend, he said.

Based on the ministry’s survey, the price of school uniform has remained unchanged from last year.

The ministry has been campaigning to cap school uniform price as a way to help parents coping with the new term’s expenditures.

[LuckyLew]

So if you remove all the negative factors you end up with positive. Wow

[Thaddeus]

Taking lessons from TAT?

[chainarong]

The indicators that treasury will note is the performance over three , three monthly quarters , of whatever value , if you calculate that the negative inflation has been happening over three consecutive quarters you then have Negative inflation or inflation whatever, this leads to a lead lag situation that generally the country is well and truly in the Sh!!t before everyone wakes up , that is why countries go into recession and the population can see it happening long before the official figures are announced, either way Thailand is in downward drift on the up- side they are not alone

[impulse]

The article makes sense.

A decrease in the inflation rate is not the same as deflation- as long as inflation stays above zero. Which it apparently has...

This year’s four-month inflation is at the average of 0.65 per cent.

I'm not vouching for the accuracy of the information. Just the logic presented.

[maoro2013]

However the definition of when deflation occurs is missing from this post

[Loptr]

Hmm, seems the Thais got the memo to not to refer to "negative inflation" by the correct term, which is DEFLATION... This term has been banned from the lexicon of western media for some time now... Looks like the memo finally found it's way to Asia...

[Thakkar]

Still not deflation, but precariously close. This is the ideal time to announce an increase in the minimum wage. The passage of the law and negotiating the various details between stakeholders may take several months. The expectation will be enough to avert deflation.

Once you get into a deflationary cycle, Its grip is vice-like, so it's best not to be too sanguine about the fact that, technically, we're not yet in deflation.

T

[quidnunc]

So if you remove all the negative factors you end up with positive. Wow

It is standard practice all over the world not to factor in highly volatile items like food and oil into the monthly inflation rate to come up with what is called a core inflation rate.

[gandalf12]

Go back from inflation and you get deflation or is in short the start of a recession

Edited May 3, 2015 by gandalf12

[Srikcir]

The baht has begun deflation and likely to continue through 2015Q3. If by that time the Junta still rejects a referendum on the constitution or amendments to the constitution favored by both the major political parties, collapse of the baht will continue through 2016Q2.

Meanwhile, the number of new generals is increasing - 1,043 officers from the three armed forces. Surely with their new economic advantage they will boost the economy through consumerism.

[Pinot]

Still not deflation, but precariously close. This is the ideal time to announce an increase in the minimum wage. The passage of the law and negotiating the various details between stakeholders may take several months. The expectation will be enough to avert deflation.

Once you get into a deflationary cycle, Its grip is vice-like, so it's best not to be too sanguine about the fact that, technically, we're not yet in deflation.

T

Can't we attribute this to financial stability, coupled that with oil taking a dive? That's where all the deflation is...cheap oil. I think we're a ways from deflation's vice like grip.

LOS real estate is in the dumper, as it should be. Where will the next empty condo project go in, next to me? They could be make some changes in ownership laws, but they won't.

The world economy seems to be tenuous, but I'm betting it will run awhile.

[expat888]

Yes, until 2017.