Food drives December inflation

ECONOMY

Published: 3 Jan 2013 at 00.00
Newspaper section: Business

Inflation hit a 13-month high in December, as subsidies failed to counter rising prices for food and fuel and the rate bounced back from a low base recorded a year earlier when the country was caught in massive flooding.

Vatchari : Wage impact not much

The index of consumer prices rose 3.63% last month from the same period the year before, compared with a 2.74% rise in November.

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boons
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Discussion 2 : 03 Jan 2013 at 11.342
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D1: Yes. This is a classic wage-price spiral. Wealth cannot be created by decree. What's worse is that higher wages bring decreased competitiveness & margin-compression to SME's and exporters. Inflation is being compounded by rising consumer credit which creates a bubble of liquidity and pulls forward demand. While this credit expansion is currently having a "feel good" effect on the Thai economy, it will eventually lead to a rise in non-performing loans and systemic instability as the coming trough in consumption meets the slow down in Thai exports caused by decreased competitiveness and slowing western consumption.
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spiceman
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Discussion 1 : 03 Jan 2013 at 07.361
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She must be joking or something. Inflation is defined as too many Bahts chasing too fewer goods & services. Since, price of (imported) oil is stable, which removes an important cost-pushing component from our (domestic) food production's equation. And since, there has been no recent natural disasters whatsoever, which adversely affects the quantity of food produced, but why is food's price still rising? This leads to only one possibility, rising wages, or an expectation of it, thanks to the Govt's new minimum wage. Remember that, in Economics, there is no " free lunch," as it always costs someone, something.
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Food drives December inflation | Bangkok Post: business