South Africa = 7,2 %, China = 6,2 % in september, Vietnam = 8,8 %… What I’m talking about ? Inflation of course.
Emerging countries are suffering from inflation.
And what about western countries ? Same. “The inflation rate in the 13-nation euro area rose to 2.6 percent from 2.1 percent in September, the European Union’s statistics office in Luxembourg said today” (Bloomberg).
The trend is global.
But apparently, Thailand thought it could avoid this plague… Like France was thinking in 1986 that the radioactive cloud from the Chernobyl’s accident would stop… at the border with Germany…
The situation is changing. Fast.
And the BOT starts to show at last some common sense.
“Thailand is bracing for inflationary pressure next year following hikes in global oil prices, which are pushing up the cost of products and wages, the Bank of Thailand warned yesterday.
Central bank senior director Amara Sriphayak said the BOT feared a secondary inflationary blow would hit the Kingdom next year. The first-round is expected to occur after product manufacturers raise their prices due to an increase in oil-related production costs. After domestic demand improves and pushes up the economic-growth rate, manufacturers tend to hike wages, which would create a second impact. ” (Nation)
However, I disagree with the cause of the second impact… Improvement of demand, higher growth, and then hike of wages ? I think the BOT is reading too many classic economy books.
Where is the growth ? Where is the improving domestic demand ? !
It’s very likely that the BOT misunderstands the situation : we are heading toward a stagflation.
Weak growth and inflation.