The inflation tsunami is coming

Since last october, I write that we could face a risk of an inflation tsunami in Thailand. I’m afraid that I was right.

Consider this string of news (for more click here) :

-The Deputy Managing Director of the PTT admits that the retail price of diesel in the domestic market may hit 35 baht per liter soon due to irregular hike of diesel price in global market. (PRD)

– Aside from taxi’s, operators of all other transportation modes are getting ready to submit fare hike requests to the Transport Ministry as well. They say the increase is badly needed after diesel prices reached a new high of 33 baht per liter. (TOC)

-Representative from the Taxi Siam Co-Operative said that a group of the co-op leaders would be meeting with the Transport Minister this afternoon to ask for an approval in raising local taxi fares by between 10 and 15 per cent, as suggested in a joint study by the Land Transport Department and taxi operators (TOC)

-Thailand’s food product conglomerate, Charoen Pokphand or CP, expects the price of rice in the local market to go up further by as much as 20 per cent if the Philippines decided to pay a high price for rice. (TOC)

There is no escape :

-with a continuous increase of costs inflation (commodities, oil, raw materials)

-with therefore a pressure on people’s purchasing power

-with therefore, a pressure on wages to come (you can be sure that employees will start soon to ask for higher wages, the government has already done it with civil servants)

-with a continous policy from the government to postpone, delay, suppress prices increases with public and privates companies

-with a continous policy from the government to boost the GDP (with many so called “stimulus packages”, tax cuts and other subsidies for some sector like real estate)

… this ugly picture leads to only one outcome : inflation.

Short and mid term… there is no escape.

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.

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