Inflation, CPI : bravo, they broke the thermometer

Thailand’s inflation in January fell marginally by 0.4 per cent year-on-year, its first decline in more than nine years, according to Siripol Yodmuangcharoen, Permanent Secretary for Commerce. (TNA)

Bravo Thailand ! Right in the middle of a full blown crisis, the stupid bureaucrats had a great idea : to change the thermometer of inflation…

When they started to talk about it, I didn’t believe them. But it’s done.

For the CPI report of january, they have changed the base year for the calculation of the index… (from 2002 to 2007) and they have changed (this is much worse) the relative weight of each item.

For instance :
BEFORE : Food and beverage = 36 % of the index
AFTER : Food and beverage = 33,01 % of the index

BEFORE : Transportation and communication = 21,98 %
ATFER : Transportation and communication = 26,80 %

The result ? Since oil prices are crashing… and since the transportation item has more weight… the effect on the total CPI is greater… AKA inflation rate is going down… more with the new system, than with the old one.

Double whammy with food : food prices are still high compared to last year… but this group has less weight in the new index, therefore the effect on the CPI is mechanically reduced.

Convenient for the clowns, huh ? !

Hopefully, ThaiCrisis is aware. And is watching.

Here is the new serie, with the old one. A red dot on the lines that have changed… All of them… excepted 2 items…


I mean, if they were serious they should give (at least during a few months) the old calculation along with the new calculation, or an Excel file with all the data, so we could do it ourselves.

But better to blind people.

I can’t use my chart anymore, we can’t make forecast using the readings of the previous months to anticipate the year on year difference in %, we can’t make comparison on a long time scale.

(Source Bureau of Trade and Economics Indices)

3 Responses to “Inflation, CPI : bravo, they broke the thermometer”

  1. 1 Yeti 2 February 2009 at 4:26 pm

    From the same TNA press release:
    “On unemployment problem, Mr. Siripol said unemployment in Thailand now stood at 1.4 per cent or about 500,000 people.”

    Is that a joke?

  2. 2 ThaiCrisis 2 February 2009 at 7:06 pm

    Well… yes of course. But it’s not a vicious one. Just the sign that… it’s impossible to “grab” the reality of the “labor force” in Thailand, and impossible to put proper figures on it.

    Of course, on one side, you have the employees in companies, linked to Social Security, Revenue Department etc.
    For this group, it’s easy… Western gauge applies.

    But this group is… small compared to the people up country, working… in the fields… part time, half time, quarter time… whenever they want, “helping” neighbours, their family… or people who have small activities or businesses “on the side” (not declared) : soup carts, etc.

    I mean, how do you want to put those people into statistics ? It’s impossible.

    Therefore, all the stats linked to employment… have poor meaning. And it might even be an understatement. 😉

  3. 3 Yeti 3 February 2009 at 11:27 am

    Universities here love to poll people, maybe they could do Labour Force Sample Surveys, after all this is supposed to be the method of choice to measure unemployment.
    But who wants to know anyway…

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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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