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  1. #1
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    Domestic inflation drop to 3% in January

    Domestic inflation drop to 3% in January


    The domestic inflation rate in January fell to 3.0 percent from 3.5 percent in December due to falling world's oil prices, the Commerce Ministry said Thursday.

    This is way below the market's projection of 3.4 percent, thus the government has to revise down this year's inflation forecast to 1.5-2.5 percent from 2.5-3.5 percent forecasted earlier.

    Inflation is expected to remain steady at 3.0 percent in the next few months, or decline further, Karun Kittisataporn, the ministry's permanent secretary said.

    Energy prices in December fell 4.4 percent year-on-year, but food prices rose 6.3 percent, while transportation costs rose 10.6 percent, the ministry said.

    On a month-on-month basis, January inflation fell 0.3 percent, while core inflation, excluding volatile food and energy prices, rose 1.6 percent from a year earlier.

    Agence France Presse

  2. #2
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    Dougal's Avatar
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    Is the cost of housing included when they calculate any of the inflation figures?

  3. #3
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    ^ not too sure mate, but according to this report, average house prices fell last year (see underlined section below)!!

    Condo body wants loan ruling revoked

    The Thai Condominium Association will ask the Bank of Thailand to revoke the recent instruction prohibiting commercial banks from approving loans to foreigners to finance property purchases.




    President Atip Bichanont said the purchasing power of foreigners was limited by the instruction introduced early this year as a way of discouraging currency speculators.

    At a property market seminar yesterday, panellists said they expected the property market to grow by no more than 5 per cent this year due to an absence of foreign investor confidence in spite of lower interest rates and stable oil prices.

    Thanawat Phonvichai, director of the Economics and Business Forecasting Centre at the University of the Thai Chamber of Commerce, said interest rates should drop by between a half and a whole percentage point this year and oil prices should be more stable.

    But he believes these factors will not do much to boost the confidence of consumers, who are now more concerned with the political situation. The New Year's Eve bombs in Bangkok further dampened market sentiment.

    Besides, the purchasing power of foreigners is limited by the central bank's instruction to suspend property loans to them, said Atip.

    Foreigners could borrow up to 60 per cent of a project's value before the central bank acted to block speculative money that may come under the guise of property loans.

    Atip said the association would meet the Bank of Thailand later this month to ask it to revoke the instruction because most foreign borrowers are genuine property buyers.

    Foreigners buy about 49 per cent of the 20,000 condominium units sold each year, but only 10 per cent of them seek loans to finance their purchase.

    Thanawat said the purchasing power of Thai buyers would continue to slow until the middle of the year because people are concerned about the political situation. The market should improve in the third and fourth quarters when the government's policy on mega-projects, covering five new electric rail routes, starts to take shape.

    The decision to open bidding for the first route in March, and the reimbursement of the necessary budget, should increase consumer purchasing power in the second half.

    Samma Kitasin, director-general of the Real Estate Information Centre at the Government Housing Bank, said he estimated that 82,000 property units would be sold this year, compared to 78,000 last year.

    Growth will be a result of the mega-projects, as a number of property projects are likely to sprout along the mass-transit routes because of the changing lifestyle of urbanites who prefer to live close to the routes.

    The ratio of sales of condoms to detached houses is set to rise from 1:6 to 3.5:6.

    Atip said that while property operators would face rising construction costs of 7 per cent to 9 per cent this year, they will find it difficult to increase prices due to limited purchasing power. Therefore, they will have to improve cost efficiency.

    The average housing price has fallen from Bt3.5 million to Bt2.8 million because people are looking for more affordable property.

    Property operators also fear that if there is no election until the end of the year, the market might see zero growth.

    Kitipon Pramoth Na Ayudhya, secretary of the Thai Real Estate Association, said operators would have to adjust by trying to diversify into the Middle East or Singapore to expand their logistics and office buildings.

    Prasong Owlarn, president of the Housing Business Association, said the property market this year should grow by only 3 per cent because of declining purchasing power and the economic trend, which would slow down from the middle of the year to the third quarter.

    Meanwhile, Housing Finance Association chairman Kitti Patanapongpibul warned that supply in the property sector had possibly overshot demand and might create a small crisis in the present environment.

    Finished residential houses this year are expected to number 83,000, compared to 79,000 last year. But new housing loans, reflecting demand, contracted 10 per cent last year, following a 5-per-cent decline in 2005. In 2003, new housing loans expanded by up to 80 per cent.

    However, Government Housing Bank president Khan Prachuabmoh downplayed the concern, saying the number of finished residential units remained low compared with 170,000 homes in 1996.

    He predicted that condominiums, particularly those in Bangkok, would increase significantly by 32 per cent this year, while finished houses would grow 5 per cent to 83,000 units. Residences priced at less than Bt3 million will be the most popular.

    Kitti said he hoped the lending interest rate would decline by one percentage point this year, helping to boost purchasing power and housing loans. He said the two-percentage-point hike in the lending rate over the past two years had cut purchasing power by 20 per cent.

    Somluck Srimalee
    The Nation

  4. #4
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    Does that mean the housing market bubble already bursted but noone realized because they are still successfully telling it is not bursting?

  5. #5
    Mid
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    Commerce Ministry says inflation rate of January grew by 4.3%
    01 Febuary 2008

    The Ministry of Commerce reports that the inflation rate of January 2008 expanded by 4.3% comparing with the same period of last year, adding that alcohol and cigarette price increases will slightly affect inflation.

    Permanent Secretary for Commerce Siripol Yodmuangcharoen (ศิริพล ยอดเมืองเจริญ) says food and beverage prices have increased by 4.8% and other products by 3.9%. The inflation rate of January is higher than that of December last year by 0.8%. Prices of fresh vegetables, fruits, pork, and chicken have increased by 1.6% while petrol oil, tires, and batteries have risen by 0.2%.

    Mr Siripol expects that the inflation rate of the first quarter of the year will stay around 3-3.5% and the overall inflation at 3.5%.

    thainews.prd.go.th

  6. #6
    disturbance in the Turnip baldrick's Avatar
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    Quote Originally Posted by Mid
    petrol oil, tires, and batteries have risen by 0.2%.
    by my reckoning fuel prices have gone up about 25% in the last 3 years

    Quote Originally Posted by William
    The ratio of sales of condoms to detached houses is set to rise from 1:6 to 3.5:6.
    does that mean that because people are practicing safe sex there is less children , so negating the need for a larger house ? ok , ok , ok .

  7. #7
    Have you got any cheese Thetyim's Avatar
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    Quote Originally Posted by Mid
    while petrol oil, tires, and batteries have risen by 0.2%.
    Talk about manipulating the figures
    Making those four in to one group gives a nice low figure.
    Petrol has gone up a lot and I buy it every week, batteries are about the same price and I but once every three years

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