Thai inflation rate lowest in 5 years, 8 months

[webfact]

Inflation rate lowest in 5 years, 8 months

BANGKOK, 2 June 2015 (NNT) - The Ministry of Commerce on Tuesday announced that the inflation rate in May 2015 dropped to -1.27%, remaining in the negative territory for five consecutive months. It is the highest negative inflation rate in five years and eight months.

Inspector of the Ministry of Commerce Somkiat Trirattanaphan said the consumer price index or inflation rate in May 2015 was 106.53, decreasing by 1.27% compared to the same period last year. However, it increased by 0.17% compared to April 2015, resulting in a 0.77% drop in 5-month average inflation from January to May.

The factors contributing to the -1.27% inflation rate included a 0.11% increase in the food and non-alcoholic beverage index and a 2.00% drop in other indices.

The Ministry of Commerce forecast that the tendency of the Thai inflation rate in the second half of the year would likely rise in line with global oil price.

-- NNT 2015-06-02

[webfact]

Inflation set to return soon
The Nation

BANGKOK: -- ALTHOUGH INFLATION in May dipped to its deepest level in 68 months, the Consumer Price Index is expected to bounce back on rising global crude-oil prices, according to the Commerce Ministry.

The CPI for May contracted by 1.27 per cent from a year ago, but expanded slightly, by 0.17 per cent, from April, showing that inflation has been bottoming out and should start climbing back in the following months.

Inflation fell last month on lower domestic oil prices and lower electricity bills. The fuel adjustment charge for the May-August period was trimmed by 9.35 satang per unit.

Source: http://www.nationmultimedia.com/breakingnews/Inflation-set-to-return-soon-30261427.html


-- The Nation 2015-06-02

[Pimay1]

Somkiat must have engaged TAT to come up with these inflation figures. Here in Esaan, prices of almost everything has risen steadly in the last year.

[Prbkk]

Crazy nonsense...anything imported is going up like a rocket ( and most of what I buy is Euro or AUD sourced so exchange rate CANNOT be the explanation). Swiss, ok, maybe understandable but other imported goods are just ripoff levels.

Exporters around the world are trying to maintain market share and grow a little, so their pricing is not the issue. The explanation, at least for imported food, is a combination of ludicrous excise and profiteering.

Where is ALDI? ( too smart to enter a nightmare market).

[anto]

The hight Baht ,should make imports cheaper .I was back in the British Isles last month after 3 years .Could not believe how much cheaper things are over there .I am talking about shop prices only .Cheese a third of the price ,ham half price,beer half price ,Milk cheaper ,wine ,margarine,tomatoes ,fruit juices,tea ,coffie ,electronic goods ,etc ,etc .It was quite depressing really.Cars and big motorcycles also .

But before anyone says ,Rents over in UK/Ireland sky high ,and electricity rates and many other government charges ,Gasoline and tobacco also .

Edited June 2, 2015 by anto

[h90]

Crazy nonsense...anything imported is going up like a rocket ( and most of what I buy is Euro or AUD sourced so exchange rate CANNOT be the explanation). Swiss, ok, maybe understandable but other imported goods are just ripoff levels.

Exporters around the world are trying to maintain market share and grow a little, so their pricing is not the issue. The explanation, at least for imported food, is a combination of ludicrous excise and profiteering.

Where is ALDI? ( too smart to enter a nightmare market).

Well we as importer had lowered our prices 3 times because of the high Baht or low Euro. And just now consider to rise a bit again.

[Chao Lao Beach]

-1.27 means it is cheaper to wait to next month to buy my stuff right ?

[phoenixdoglover]

This is another sign of an economy in a moderate slump. Probably also the result of a timid monetary policy.

[Anthony5]

So there is a deflation of 1.27% this month?

Yeah right I could see that when Big C last week once again increased their prices for THAI produce by 15 to 21%. This was the second increase in 6 months by the way.

http://www.thaivisa.com/forum/topic/827960-another-sign-of-low-inflation-in-thailand/

Edited June 2, 2015 by Anthony5

[elgordo38]

Somkiat must have engaged TAT to come up with these inflation figures. Here in Esaan, prices of almost everything has risen steadly in the last year.

They are just taking a page from the playbook of Western and European nations. It was just a matter of time till they figured this out to flim flam people. I receive a huge 1.7% increase in my pension. My bank offers me .25% on my savings(all my working years the government encouraged me to save for my retirement what a crock of HS) which they the government wants to borrow to waste and also to lend to their big business buddies for M&A activity at almost zero percent interest rates its a suckers game for us. We are hemmed in on all sides with low pension increases, low interest on our savings poor return if you invest in annuities which have a high commission fee for life. My daughter back home tells me everything is on the rise especially food meat and fresh vegetables and it is doing so in 2015 dollars not 1995 dollars which were worth more. I think in the last 100 years our currency has shrunk about 90% in its buying power.

[Srikcir]

Whether or not the negative inflation rate puts the country into deflation, Finance Minister Sommai Phasee held that "lower inflation rate indicates the slowdown in economic activities." The Nation 2015-05-14

Now it's the end of May 2015 and the slowdown continues. BOT is due to adjust the interest rates again this month. I suspect it will be lowered more than previously planned. Zero interest rates are on the horizon.

[Thai at Heart]

Supply side costs are falling because of oil price falls. Countries shouldn't fear this type of price deflation

[BSJ]

For the average expat the cost of living is creeping up. The cost of food seems to be going up regularly. If your renting that's a burden that never comes off whether there is an increase or not. The exchange rate can make it even more tougher.

Pity those that like an alcoholic drink, smoke cigarettes, rent and enjoy 3 meals a day!.

[anto]

^Smokers have it easy in Thailand ,its beer drinkers like me who are hit hard.Will have to reduce my daily consumption.

[Cake Monster]

Its good to see Tesco Lotus trying to bring the UK ethos of competetiveness to Thailand.

Over the last several months, I have noticed a definite pricing reduction on many products at my local TL store at Pattaya South.

Of course, in true Thai fashion, Big C have increased prices in order to be competetive.

Thainess = have less customers in store because economy is on its rear end, so increase prices in order to still have market share by spend.

[TheAppletons]

Whether or not the negative inflation rate puts the country into deflation, Finance Minister Sommai Phasee held that "lower inflation rate indicates the slowdown in economic activities." The Nation 2015-05-14

Now it's the end of May 2015 and the slowdown continues. BOT is due to adjust the interest rates again this month. I suspect it will be lowered more than previously planned. Zero interest rates are on the horizon.

The Financial Times has a story today that headlines "Thailand falls further into deflation."

This is from Marketwatch:

"BANGKOK-Thailand continued to register deflation in May, when the consumer price index slipped on falling oil, electricity and food prices.

The headline consumer price index dropped 1.27% in May from a year earlier but inched up 0.17% from the preceding month, the Commerce Ministry reported Tuesday.

May's headline CPI, which slipped for the fifth consecutive month, was weaker than the median 1.04% year-over-year contraction and the median 0.35% month-over-month increase forecast by economists polled by The Wall Street Journal.

Somkiat Triratpan, director of the Commerce Ministry's Trade and Strategy Bureau, attributed the continued contraction in consumer prices to weaker retail oil prices, lower electricity charges for the May-August period and falling prices of some food items.

During the first five months of this year, the country's headline inflation fell 0.77% from a year earlier.

Meanwhile, core inflation, which excludes volatile oil and food prices, increased 0.94% in May from a year earlier and 0.05% from a month earlier, lower than the forecast median 1.0% year-over-year increase and 0.105% month-over-month rise."

[Emster23]

As pointed out, negative inflation has a term Deflation... come on, say it. Less money chasing same amount of goods perhaps. Using term inflation is like saying "Aston Villa negatively won FA Cup over Arsenal 0-4"

[sgtsabai]

I agree with Pimay1. You should, or maybe not, hear some of the "comments" my wife makes after a visit to the market, Big C or Tesco. Prices have been rising for Thai people, not just farangs for years and show no sign of slowing down. I think TAT must be coming up with the figures for deflation, I sure don't see it up here and neither do anybody else.

[theguyfromanotherforum]

The negative inflation rate doesn't mean food prices are going down. Newsflash! Food prices never go down.

Probably the price of condos, gas, cars or whatever stagnated = sales didn't pick up.

[trogers]

Whether or not the negative inflation rate puts the country into deflation, Finance Minister Sommai Phasee held that "lower inflation rate indicates the slowdown in economic activities." The Nation 2015-05-14

Now it's the end of May 2015 and the slowdown continues. BOT is due to adjust the interest rates again this month. I suspect it will be lowered more than previously planned. Zero interest rates are on the horizon.

I would deposit my money in the banks for safekeeping at zero interest rates.

But should they start paying me interest on loans issued to me...I would start spending...