Inflation in Thailand...

[dummy_plug]

(katoeylover @ Jul. 21 2008,07:43) I just dont see how Thailand can be immune to world problems.

Do they have their own oil resources? If they dont, they will be hit as hard as everyone else.

This is from wikipedia, so may not be reliable, but I think the general info is spot on. In 2005 Thailand used 838,000 barrels of oil a day and only domestically produced 306,000 barrels of oil a day. At that rate, they would have to import 64% of their oil. I doubt their oil production has been raised by any meaningful amount since then, however, I'm quite positive that with their economic growth their consumption has risen rapidly in the past 3-4 years. I suspect they would need to import well over 70% of their oil needs today. So immune from global oil prices? I sincerely doubt it.

[stogie bear]

Well, links and statistics and economists living on the other side of the world...

...and just little old me living here! What do I know!

[dummy_plug]

Obviously there are links to Thai sources, and don't assume that just because a company has a Western name that they don't have people on the ground in Thailand.

As you said, little old you living there. Not having a go at you, but its very difficult to apply the anecdotal evidence of your life to the entire population and economy of Thailand!

[stogie bear]

Well, of course my anecdotal reference to bus fares can't be applied to a large country as a whole... further more I'm not trying to say that Thailand is insulated against the problems facing the rest of the world, but as for property going up in price...

Ain't happening.

If house prices are going up then it's because houses are getting better! The old semidetached crap holes and prefab terraces are almost impossible to shift at any price and THAT is where most Thais still live.

New builds are getting CHEAPER and I travel around this city a lot and see these builds and I even live in a gated community that is still under construction... the NEW prices have dropped from 3.9 to 3.4 million each unit...

Even farang properties are getting cheaper... Brand new condos in Pattaya for a million... that's a first!

Sorry, but I'm not sold on what so called 'economists' and meaningless statistics are telling you and me or anyone. I believe what I see with my own eyes.

Food prices haven't gone up in years... street food is still 15 baht for a plate of puke... Foodland and Sizzler are still the same... All the fast food places are in a price war in all the shopping malls...

Clothes? You have to be kidding if you think these are getting more expensive... Imports from Cambodia ain't flying the inflationary flag here!

As for plazma TVs and computers... well... all getting cheaper every day almost...

Rent... flat... but the quality of places to rent is improving all the time...

You'll be telling me next that inflation in the UK is currently 3.8%!

[katoeylover]

Isn't that the truth...

with food and gas prices rising over 30% this year alone, where do they get their statistics?

[Monkey]

Somebody didn't carry over the decimal point.

It should be 38%

[rossco]

Some great comments.

IMHO the West is obsessed with oil as they use so much of it per capita.
Thailand is different - the direct use of oil for transport is still relatively low due to the majority of preferred transport being a 100 CC motorbike - I have seen a whole family of 4 on one bike. Not unusual.

If I look at my own direct use of oil (Gas) then if it is 10% of my monthly expense and the price increases by 50% then the direct impact on my expense is 5%.

Yes there is the indirect impact via distribution, power etc etc but again the rural Thais expense is low. For a fact a Thai family outside of Khone Kaen - their electric bill for 1 month is 60 Baht (yes sixty baht) - 1 UKP, or 2 USD or 1.3 Euros a MONTH. So double the cost of electric and their spend is still low.

The majority of Thais do not have AC and certainly do not heat their homes. They have few electrical appliances - even a fridge is a luxury!

So fuel/oil prices does not have the same impact in Thailand as in the gas guzzling West. If anyone has the carbon footprint table by country I would guess that Thailand is low down on the list with USA near the top.

Inflation is caused by spending (consumption) and that is lower, per capita, in Thailand.

Their recycling is less well organised than the West BUT it is incredibly efficient. My garbage bin is raked through for glass, plastic, metal, paper etc etc.

The majority of Thais diet is Chicken, Pork, Fish, Rice and Vegetables and as a nation they are a net exporter of these consumables.

Bank deposit rate is 2.5%

So yes I do think inflation is lower in Thailand relative to the West.
Thais do not have the same borrowing capacity of the Westener -Mortgages etc. If they 'not have' they not have. In the West we borrow to support our ever increasing hunger for consumption and that is the root cause of inflation.

That is my opinion - I will just put on my Kevlar vest........

[sashasexy69]

Rossco, i agree with what u said and don't forget something that is very important and that is market speculators, and as we should know, past performances doesn't give a guideline but a slight indicator but thats also relative...a country as Thailand, that has established its self over centuries is not just gonna lay back and ride the wave...they have alot of sustainable growth factors, maybe oil isn't one but they do have other means of raising their GDP.
I know for a fact that whats happening there, with regards to growth isn't highly driven by local economy expansion, but as we all now that it's the new flow of non Thais which use it as a tax haven, as well as the adjacent countries that r land locked or haven't got the proper infrastructure to have a proper economy and use Thailand as a mean of expanding their own economy.

[SukhumvitRoad]

(dummy_plug @ Jul. 21 2008,11:31) ... here is a release from Jones Lang LaSalle, a major property real estate management firm about the strength and growth of Thai real estate.

Oh, I see. A group of property agents tell you that the property market in Thailand is rising every day so they must be right and those of us who live here must be wrong.

Good Lord, man, surely you can't be that naive.

[stogie bear]

(robbo @ Jul. 21 2008,01:04) stogie mate everyones gangin up on u on this one...

The tide is turning!

[Road Runner]

I've seen myself (and been shown by others) that at the moment in Thailand there are lots of properties for sale or rent and not so many customers.

Yes the Thai way is to put the price up and hope someone will be dumb enough to buy.
The property companies mean time are discounting and offering all sorts of incentives to get customers.

I can't confirm Stogie's quote;- 'NEW prices have dropped from 3.9 to 3.4 million each unit...' but it would not surprise me.

If you're in the market for a new apartment at the top end of Sukumwit I would suggest that now is a good time.

RR.

[dummy_plug]

(SukhumvitRoad @ Jul. 22 2008,06:27)

(dummy_plug @ Jul. 21 2008,11:31) ... here is a release from Jones Lang LaSalle, a major property real estate management firm about the strength and growth of Thai real estate.

Oh, I see. A group of property agents tell you that the property market in Thailand is rising every day so they must be right and those of us who live here must be wrong.

Good Lord, man, surely you can't be that naive.

Wow...do you even know what JLL does? Or do you live under a rock in BKK?

[dummy_plug]

(Road Runner @ Jul. 22 2008,06:38) I've seen myself (and been shown by others) that at the moment in Thailand there are lots of properties for sale or rent and not so many customers.

Yes the Thai way is to put the price up and hope someone will be dumb enough to buy.
The property companies mean time are discounting and offering all sorts of incentives to get customers.

I can't confirm Stogie's quote;- 'NEW prices have dropped from 3.9 to 3.4 million each unit...' but it would not surprise me.

If you're in the market for a new apartment at the top end of Sukumwit I would suggest that now is a good time.

RR.

Well, I wouldn't be surprised if real estate prices have been dipping as of late - say last 12 months or so, and with it rents. One only need look to other Asian markets where housing prices are being hit due to economic woes - thats pretty evident. But what I was referring to was a run-up within the past few years.

Anyways, people pulling numbers out of the sky doesn't sway me much. Like I said, one man's view can't be used to extrapolate across a nation. Just because a street food vendor doesn't raise the price of his dish to you, doesn't mean that his costs haven't risen!

How you can ignore inflation is beyond me, its easy enough for me to see every time I go to the gas station, supermarket, or consumer goods store.

[stogie bear]

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What a pretentious load of garbage! It doesn't even mean anything.

Er... once you get past all that pretentious crap about what THEY say that they do it boils down to the fact that they are a real estate agents.

They rent and sell over priced houses and flats and stuff and arrange loans through their friends to sell them to stupid rich people.

They are the last people in the world who are going to even hint that they are selling piles of bricks that are losing value!

[rossco]

I like the way the thread has become totally West orientated - PROPERTY price.

Unfortunately the average (95% of the population) are NOT property speculators!

Ask yourself - How long did your Mom and Pop live in their house? Did they move up market every 2/3/4/5 years?

So as usual the West sees a different perspective on investment/inflation/economics. Please keep that in the West. Asia is NOT the same.

As anyone knows who has taken their head outside of BKK/Pattaya, Thailand and the other tourist areas of Thailand, are rural. Illiteracy is high and they do not speculate on house prices - they actually just live in them - surprise - just like our forebears did!

The point of inflation is consumerism which is why the West suffers in a property market downturn - you buy a house, it increases in 'market' value so you borrow against it to buy a holiday/car or a makeover for home/wife. This is not the way Thais look at property ownership - hence they do not fuel consumerism.

So now the West is bleeding as the guy has borrowed 300% of is property value, in current markets, - just when was he going to actually own his house?

Speculation is a Western phenomena that does not really exist in Thailand. Thais have a more basic, family orientated lifestyle - something the West lost about 80 years ago. In the West we used to hold onto our land and protect it to pass on to our family. Now we just trade it.

Speculation is just that - speculation. How can I make money in either a falling or rising economic environment.

Back to inflation - yes, Thailand is probably less impacted by fuel prices as their motor traffic is more economic - a Honda motorcycle of 100cc does not consume the same gas as a US Detroit 5 Litre car.

Of course fuel price impacts the common people of Thailand but not by the same amount as the West.

It is all relative. You do not 'make' money on your home/house until you actually sell it - of course you do need to find alternative accommodation.

Most Thais are shocked at what a Westerner will spend on a house/condo because in their rural environment such prices are monopoly money.

It is a question of lifestyle and personal economics - I really hope that Wester attitudes do NOT befall Thailand in my lifetime.

My personal forecast is that we will see increases, in the cost of living, in Thailand, BUT not fueled by the excesses of the West.