Inflation target cut further

[webfact]

INFLATION
Inflation target cut further
Petchanet Pratruangkrai
The Nation

BANGKOK: -- The Commerce Ministry has cut its inflation target for the year to negative territory - minus 0.2 per cent to minus 1 per cent - much lower than the previous projection of plus 0.6-1.3 per cent, following the continued drop in oil prices and sluggish domestic economic growth.

This represents the first annual decline in prices since 2009, when inflation contracted by 0.9 per cent during the global economic downturn and the government's measures to relieve the cost-of-living burden.

The ministry reported yesterday that the Consumer Price Index (CPI) for September had fallen 1.07 per cent year on year, declining for the ninth consecutive month.

Month-on-month inflation was down 0.05 per cent.

The CPI for the January-September period was down 0.9 per cent from the first three quarters of last year.

"Inflation could be lower than expected this year, since oil prices are much lower in the world market," said Somkiat Triratpan, inspector-general of the Commerce Ministry and director of its Policies and Trade Strategies Bureau.

He made the remark as the ministry announced its revised 2015 forecast for a contraction of 0.2-1 per cent in light of an expected slowdown of Thai economic growth, lower fuel prices in the global market, and the depreciation of the baht.

Despite much lower inflation, the ministry insisted that Thailand was not yet in a deflationary situation, as consumer spending had risen, as evidenced by increased revenue collection of value-added tax, he said.

Many other countries are also experiencing low inflation rates due to declining fuel prices and slow economic growth, he added.

Based on its revised inflation target for the year, the ministry now foresees gross domestic product expanding between 2.5 per cent and 3.5 per cent, down from the previous projection of 3-4 per cent.

The average Dubai oil price is now forecast by the ministry to be US$48-$58 (Bt1,750-Bt2,115) per barrel, from $50-$60, and the average exchange rate for the year is predicted to be Bt33-Bt35 against the US dollar, from Bt32-Bt34 previously.

Last month's drop in the rate of inflation is attributed to lower fuel prices and electricity costs, as well as to some foods being cheaper.

Among the 450 products in the ministry's inflation weighting, the price of 184 items increased, 160 remained the same and 106 decreased from the previous month.

Core inflation in September, which excluded volatile fuel and food prices, was 0.96 per cent year on year and 0.07 per cent month on month.

Source: http://www.nationmultimedia.com/business/Inflation-target-cut-further-30269972.html


-- The Nation 2015-10-02

[Srikcir]

“the ministry insisted that Thailand was not yet in a deflationary situation, as consumer spending had risen, as evidenced by increased revenue collection of value-added tax”

Really? Here is the face of Depression:

"Revenues from personal income tax, car excise tax and VAT have all fallen short of targets by 14 billion baht, 5.9 billion baht and 5.4 billion baht respectively" 2015-02-19

"The Revenue Department has adjusted its collection target down from 1.97 trillion baht for fiscal 2015 to 1.81 trillion baht after large corporations reporting declining revenues, global oil price falls, and reduced import duties." 2015-02-24

"Revenue collection has missed the target by 12 billion" 2015-04-07

"According to FPO Director Kritsada Jinavijarana, the amount of state revenue collected between October 2014 and May 2015 was recorded at 1.37 trillion baht, lower than the target by 56.5 billion baht or 4 percent." 2015-06-17

"For the first 11 months of the fiscal year, Mr Krisda said the government managed to collect 1.99 trillion baht in revenues which were however 113 billion baht lower than projection….The Revenue Department’s revenue collection fell short of projection by 20.6 billion baht." 2015-09-29

"August's private consumption signalled a slowdown from a 2.4-per-cent shrinkage of collections of value-added tax at constant prices, a 5.9-per-cent contraction of VAT on imports at constant prices and a 0.2-per-cent contraction of VAT on domestic spending at constant prices" 2015-09-30

But we still have optimism with “the ministry now foresees gross domestic product expanding between 2.5 per cent and 3.5 per cent, down from the previous projection of 3-4 per cent.”

"Meanwhile the Fiscal Policy Office (FPO) said “it had maintained its target for this year's economic growth at 3 per cent.” (2015-09-30)

Maybe Somkid, the voice of economic reality, will have something to add. Oh, he has spoken:

"if all the economic packages introduced by the government are successfully implemented, Thailand’s economy will be back on strong footing in three years." 2015-09-30

[hugh2121]

Negative inflation? No sign of that in Pattaya, prices have all gone up to compensate for lack of customers.

[i claudius]

Where does he do his shopping ,everywhere we shop prices have gone up