Breaking news : the BOT discovers that inflation hits… the poors

After “The BOT discovers that water is liquid (and other basic principles)” (read here), the Bank Of Thailand has made a another astonishing discovery, result of a very deep study.

Ready ?

The BOT study found that soaring oil and food prices were having a greater affect on low-income households relative to higher-income groups.

As a result, low-income households have been left with insufficient income to pay existing debts, intensifying their debt problems. “Their ability to pay debts is minimal, which spurs the risk of debt problems when they face economic troubles,” the bank’s report said.

The study, which divides households into four groups, found that low-income households had the highest debt-to-income ratio: 7.3. That group has an average monthly income of Bt4,342 and average debt of Bt32,000. This indicates they have prolonged negative saving problems. (Nation, quotes)

If it wasn’t tragic, it would be a farce. A grotesque farce. It’s a real shame. I mean those people are paid to make such study ? !

Anyway, the BOT has a part of responsability… By maintaining negative real interest rates (cheap credit, read here) for too long, and by applauding all the insane “boost GDP growth policies” and other “stimulus packages” from the government, and other Zimbabwe style policies (weak THB policy to save “Private Exports” in 2007, prices controls, subsidies and other goodies).

As for its talents of analyst, the BOT waited april 22 to revise its inflation forecast for 2008 from a totally idiotic 4 % (!!) to a still idiotic… 5 %. Well done guys.

No vista, no talent, no imagination… Nothing. The BOT is running behind everybody and everything, far behind, like a headless chicken.

But the central bank is obviously still able to lay its eggs… I mean stupid reports. 😉

1 Response to “Breaking news : the BOT discovers that inflation hits… the poors”

  1. 1 chinesethai 24 June 2008 at 5:37 am

    In Thai, there is a saying that goes ‘ขี่ช้างจับตักแตน’ (reads Kee-Chang-Jab-Dak-Daen or riding an elephant just to catch a grasshopper). I don’t need to explain the meaning, right?

    Thaicrisis, have you been to BOT Headquarter? Almost every BOT employee drives a private car to work. Don’t they check their weekly gas bills? Nearby a number of poor squeegee people selling flowers and newspapers to drivers stuck in traffic jam just to make a living. These people are a great source of information right there next to BOT office!

    This kind of thing reflects not only how BOT works day-by-day but also Thai culture as a whole. That’s why you can see lots of big, wasteful projects that do not solve any problem like empty elevated tollway, empty wide roads to nowhere, nicely-built but abandoned OTOP outlets along highways to the Northeast Region, nicely-designed but unused bus stop signs, Thaksin-initiated Bangkok Fashion City Extravaganza parade, etc.

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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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