Published on December 4, 2007
On average, inflation over the 11-month period increased 2.2 per cent year on year. Needless to say, record oil prices have helped drive up the cost of living.
Conditions could worsen this month, with the flotation of the price of bottled gas, which could force taxis to lobby for a fare increase and food shops to raise prices.
It seems we're heading for a situation we cannot control. Who can rein in spiralling energy prices?
So, what can we do if the rise in inflation is uncontrollable? But first, let me ask those who have recently travelled to Japan whether they have any ¥1 coins left after shopping.
Are you surprised that in Japan, where ¥10,000 notes have been available since 1958, there are still a vast number of ¥1 coins in circulation?
In Thailand, where the highest-denomination note is Bt1,000, the lowest coin value is 25 satang. A friend once commented that because of the lack of 1-satang coins, Thai business people needed to raise product prices at least 25 satang, even though the actual increase should have been lower.
Shopkeepers simply do not have 1-satang coins to give as change.
"If there were 1-satang coins in circulation, goods prices could be raised exactly in line with the higher cost. Then inflation could be contained better, particularly when oil prices are so high," my friend said.
It seems he has a point. Instant-noodle prices are going up next month, and the rise could have been incremental; however, the manufacturer has opted for an increase of Bt1 a packet, a 20-per-cent jump from the current Bt5. This is still cheap in cost terms but a big hike percentagewise.
Commerce Minister Krirk-krai Jirapaet yesterday urged shopkeepers to raise prices of goods in satang and not baht.
If there were 1-satang coins in circulation, this campaign would not be necessary, as shops could raise prices in accordance with the actual cost increase.
Then the department could turn to more important issues. If he is serious about cushioning the impact on the public, Krirk-krai should seek a meeting with top Bank of Thailand executives.
I'm sure consumers would not mind carrying satang coins around if it meant price hikes would be capped.