Thailand is not yet in a state of deflation, but an influx of cheap Chinese goods poses a significant threat to local businesses, according to a new report from Krungthai Bank.<\/p>\n
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The warning comes as Thailand records its fifth consecutive month of negative inflation.<\/p>\n
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The Trade Policy and Strategy Office (TPSO) of the Ministry of Commerce reported that headline inflation in August fell by 0.79% and is expected to continue its decline in September. For the first eight months of the year, headline inflation rose by a mere 0.08%.<\/p>\n
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Poon Panichpibool, a capital markets strategist at Krungthai Bank, explained that the negative inflation is primarily due to supply-side factors such as a good harvest of fresh fruits and vegetables and low rice prices.<\/p>\n
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He also noted that government measures to ease the cost of living, such as electricity subsidies, were a significant factor.<\/p>\n
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<\/p>\n
“The country has not entered a state of deflation because there is no widespread price drop across the board,” he said.<\/p>\n
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