Worse is yet to come

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SPECIAL REPORT: Business leaders are worried that the rising cost of energy, labour could put upward pressure on inflation and hit consumer spending,

Published: 30 Apr 2012 at 00.00
Newspaper section: News

Think prices for food and fuel are high already? Even worse may yet come, argue some business leaders and economists.

Shoppers compare the price of rice at a hypermarket in Bangkok. PATIPATJANTHONG

While inflation, as measured by the consumer price index, stood at a moderate 3.4% last month compared with the year before, the numbers belie a rising sense of discontent that costs have spiralled in recent weeks.

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hawaiiman
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Discussion 30 : 30 Apr 2012 at 19.5530
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Food is the new oil. Thailand is a producer. Take advantage of it. Water is next. I'm just sayin'...
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hawaiiman
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Discussion 29 : 30 Apr 2012 at 19.5229
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Markups in Thai retail businesses exceed those in similar firms elsewhere. The government can't do anything about fuel prices without putting a huge tax burden on the people. Food prices are getting to be part of a world market just like oil. Cooking oil, sugar, coffee, some juices, chocolate, etc. are all world exchange traded commodities. Thailand is a small frog in a big pond, as far as economic matters are concerned. If you feel sorry for the poor farmers in Isaan (or anywhere else) go ask one what kind of prices he's getting for his sugar cane, palm oil, or tapioca. My wife works in the Biz' those guys are making out good, but it isn't the fault of any government.
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alvin

Discussion 28 : 30 Apr 2012 at 18.1628
dun always blame the government. some thais are lazy, some are not. they complain too much but work less. liquor business good because so many thais drinking liquour and they don't complain
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jwatch
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Discussion 27 : 30 Apr 2012 at 16.4427
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Maybe getting rid of corruption is a good way to help cost of living - no need to pay tea money (bribes) at schools, no need to pay bribes to cops to run businesses (like the noodle shops), perhaps a reduction in cost for many things since no need to pay the 30% (or whatever) "commission" everyone talks about, etc etc ..I think everyone gets the idea
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moruya
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Discussion 26 : 30 Apr 2012 at 16.3226
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There are some bizarre comments on here.

The bottom line is that the government has done nothing to control inflation. In fact I'd go as far as saying that it is doing everything to fuel inflation - intended or otherwise.

Some things are beyond it's control - global oil prices etc.

Some things are within it's control - wages hikes, food prices

Other things will follow - they are running out of funds, record borrowing, gtaxes will need to rise. Thetre has already been a mention of a 14% rise in VAT
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katestory
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Discussion 25 : 30 Apr 2012 at 16.2725
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Disc 23 hawaiiman. Regarding your fuel cost issue. It brings back memories of the early 80's when Unocal, who had an oil and gas lease in the Gulf of Thailand could not keep up their production of gas for generating electricity at the promised price To keep down inflation the Thai government managed to buy diesel oil overseas, which was cheaper for the given calorific value of the inflated gas price.
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hawaiiman
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Discussion 24 : 30 Apr 2012 at 15.5824
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D-9 The article points out that inflation already is running near 9% in some commodities. It also pointed out that the inpact from the increases in labor costs had not as yet impacted the market. Therefor my point seems to be exactly what the article was getting to. Yes any student of economics knows that any increase in the cost of production will increase necessitate increasing prices. It was pointed out in a recent article in BP that the cost of labor, even in a relativly labor intensive industry like garment manufacture, is not the major cost people like to believe it is. Take transportation. You think an increase of the wages of the driver is going to be significant compared to cost of fuel, tires, and truck/parts? Labor costs are a red herring.
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heartie
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Discussion 23 : 30 Apr 2012 at 14.5023
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All things considered and comparing Thailand's inflation rates to the rest of the world, it's not doing badly:
'world average 4.9% (2011)
developed countries 3% (2011 est.)
developing countries 6.3% (2011 est.)'
https://www.cia.gov/library/publications/the-world-factbook/fields/2092.html

Vietnam's inflation is at about 19%! Lao is at nearly 8%!
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spiceman
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Discussion 22 : 30 Apr 2012 at 14.3822
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Inflationary economic policies cause inflationary effect on the Economy? I thought this was a no brainer!
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katestory
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Discussion 21 : 30 Apr 2012 at 14.1421
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Discussion 19 : englishbob. I don't think my comment was naive at all and I'm sure if you had ministers who understood basic economics in England it would be a better place than it is, and you may be staying there now instead of trying to interfere with Thailand's business, where no-one will listen to you anyway, especially if they understand the problems that England is facing..
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