Gaybutton Posted June 17, 2008 Posted June 17, 2008 Prices have gotten higher in Thailand. Fuel costs are responsible for much of it. Gasoline is now over 40 baht per liter. At today's exchange rate, that's US $4.57 per gallon, folks. When I bought my car two years ago, I could fill it from empty for 800 baht. It now costs me over 1600 baht. I have noticed that prices that had never changed at all since I first started coming to Thailand are now going up. For example, there is a little mom-and-pop shop down the street from me, where the "mom" makes what I think is the best fried rice in Pattaya. It's always been 20 baht. Within the past week she had to raise her price to 25 baht. Now, that in itself won't break the bank, but it does represent the typical percentages by which prices are rising. Pork is an essential ingredient for a great many Thai dishes and the price of pork has always been incredibly inexpensive in Thailand. Now the price of pork has gone up and a great many Thais are up in arms about it. They can't afford it. The government's response: Buy chicken. I've noticed prices have dramatically risen, percentage-wise, for a great many grocery store items. Restaurants are raising their prices. Soon the baht buses and motorcycle taxi prices are probably going up. Truckers are threatening to halt operations as early as next week if something isn't done about diesel prices. The exchange rate has gotten a little better for most western currencies, but the inflation is quickly eating up the gain. The following appears in the BANGKOK POST: _____ BoT Rules Out Urgent Meeting July 16 is next rate date despite inflation by Parista Yuthamanop The Bank of Thailand says there is no need to call for an emergency meeting to review monetary policy, even with inflation at a 10-year high. Tarisa Watanagase, the central bank governor, yesterday brushed aside the need for the Monetary Policy Committee to hold a supplementary meeting ahead of its current schedule. The MPC's next meeting is scheduled for July 16. Analysts expect the committee to push for an interest rate hike due to growing inflationary pressure. The consumer price index rose to a 10-year high of 7.6% year-on-year in May, driven primarily by higher fuel and food prices. ''If the MPC meeting is held out of schedule without a necessary cause, it will lead to market panic. And there will be suspicion that there is some unanticipated information [forcing action],'' said Dr Tarisa, who chairs the MPC. ''We will stick to the rules of the game that the MPC meets every six weeks. Market participants have already anticipated what the MPC's move will be at the next meeting.'' Local banks, including Bangkok Bank and Siam Commercial Bank, have raised loan and fixed-deposit rates earlier this month in anticipation of rising BoT rates. At its last meeting on May 21, the MPC kept the one-day repurchase rate unchanged at 3.25% but clearly adopted a more hawkish bias in light of rising inflation. Policy rates have been maintained at 3.25% since mid-2007. Dr Tarisa, who is facing growing criticism that the central bank has been slow to respond to rising prices and their impact, said inflation could break double digits at some point this year, depending on global oil prices. But average inflation for the whole year was expected to remain under 10%, she said. The consumer price index for the first five months of the year rose 5.8% from the same period last year. ''If oil prices continue to increase, it is possible that inflation could reach double digits at some point. But that depends on the base as well. There is some chance, but I think an insignificant one,'' Dr Tarisa said. She said that a mix of monetary, fiscal and foreign exchange policies was needed to address inflation. Fiscal policy, she said, should focus on improving the country's infrastructure to reduce the country's dependence on imported oil, while monetary policy targeted price stability. Policy interest rates were already the lowest in the region, according to Dr Tarisa, and were actually in negative territory if inflation was included. Public debt, meanwhile, at around 38% of gross domestic product, was relatively low and offered room for increased public investment. Dr Tarisa said fears that rising interest rates would undermine economic growth were exaggerated. ''If the MPC has to raise interest rates, there will not be much impact on spending and economic growth. We are fortunate that there is room in both monetary and fiscal policies. We have no problem with either the level of public debt or monetary sustainability,'' she said. Dr Tarisa noted that logistics and transport expenses consumed around 24% of gross domestic product compared with 10% for other countries, showing the large potential savings for the private sector if transport infrastructure was improved. Interest rates, meanwhile, represented only a small component of overall costs for companies, she said. Quote
Gaybutton Posted June 19, 2008 Author Posted June 19, 2008 The following appears in THE NATION: _____ Consumer Goods Go for Full Price Rise; Taxi Fares Up By Petchanet Pratruangkrai The Nation Published on June 19, 2008 Consumer-goods manufacturers Sahapathanapibul, Unilever, Procter and Gamble, Kao, Lion and Colgate-Palmolive are pushing their prices to the currently permitted ceiling to cope with the rising cost of raw materials, a move which could drive up inflation alongside an increase in taxi fares. The Transport Ministry yesterday approved a 12-per-cent increase in taxi fares, effective this week. Commuters will need to pay Bt35 for the first kilometre, against the first 2km at present. The rate for subsequent kilometres will be raised by 50 satang per km. For example, the fare for 2-12km will be Bt5 per km, from Bt4.50 at present. A consumer group plans to petition against the move, citing that most taxis are powered by cheap natural gas and their drivers therefore have no reason to raise fares. As the Bank of Thailand highlights the possibility that inflation could hit 10 per cent this year, the six major consumer-goods makers, who control 90 per cent of the market, told the Internal Trade Department yesterday they could not maintain their prices. After their prices hit the ceiling, the manufacturers may also have to ask for the department's approval for a further price hike to cover rising costs, said Prapot Nanthawatsiri, president of the Thai Soap, Detergent and Personnel Care Manufacturers' Association. "It is very difficult for us to freeze prices as requested. For now, all we can do is to increase prices within the ceiling, but soon we may have to ask for permission for a further price increase," said Prapot. Despite stating that Saha Group, where he is a senior executive, would be the last to increase retail prices despite losses, he said detergents would be the first items whose prices will be raised - as more than 40 per cent of the products contain petroleum by-products as a raw material. Soap and shampoo prices would be the next to be increased, as 30-40 per cent of their raw materials are affected by the soaring price of oil. Internal Trade Department deputy director-general Vatcharee Vimooktayon is hopeful the producers will not raise their prices sharply, in fear of a smaller market share at a time of lower purchasing power. "The government should seek new measures to bring down the burden on consumers," Prapot said, suggesting that the government focus on food prices and fares. Quote
