We are facing with undeniable increase product price. Although the government has subsidies to alleviate the suffering. But after that was inflation.
BBC Thai said that after discussing with Jareeporn Rungprasertsuk (trade officer, professional level), Trade Policy and Strategy, Ministry of Commerce. BBC Thai will easily explain this difficult thing to be understandable. Let’s get to know the world of products that are used to measure the living costs of Thais.
BBC Thai gives an example of 10 to make you surprised to know that it is used to measure the monthly inflation rate.
Recently, Thais have 430 kinds of products to measure the price to reflect the cost of living in Thailand.
From the total of 430 kinds, it can be divided into 7 categories.
First categories that people spend the most money is food and alcohol-free drinks, which is 40.35% of the total expenditure of the people
The rest 6 categories are others nonfoods and drinks product. The housing category has a high public expense of 23.17%. followed by vehicles, transportation, and communications at 22.67% of the total expenditure.
There is also a clothing and footwear category; the medical and personal care category; the entertainment category; the reading category; the education category; the religion category, and the tobacco and alcoholic beverages category.
Usually, there is an update every 4-5 years to reflect consumer expenditure. Miss Jareeporn also says modernity is what her agency focuses on.
She added that the agency is currently working on a list of products to be included in 2023-year base survey, which will replace the latest data, which references products from the base year 2019.
“Air fryer wasn’t added but Netflix and JOOX were added,” she said. She was talking about the popular streaming platform.
“Milk tea is still offering” she said and there also product such as Air fryer which bought quite a lot in the capital. But to compare with whole nation, there is still a very small proportion.
It is also preparing to offer ATK test kits and Andrographis paniculata.
The other regular expenditure that prepares to be added to a 2023 product list is the delivery platform fee.
Miss jareeporn Explain which goods will serve as a base to measure people’s living costs. There will be proposals coming in from many parties. Then the agency will send a list of these products to the National Statistical Office for collecting data.
“The mimosa never be added. Sometimes there are no spoons, bowls or pots.”
She explains that finally these products will be added or not is depend on how people respond to the survey. And some product has come and gone. But usually, the main item is always included in the survey, and “house rent” is a large part of the cost.
According to a survey by the trade policy and strategy office, found that the expenditure of Thai households for the month of June 2022 was 18,088 baht, of which almost 60% was spent on non-food and alcoholic drinks. The rest is food and non-alcoholic drinks.
From this monthly expenditure, Thai households pay fare-transportation costs Including the cost of fuel and mobile phone service charges, totaling about 4,400 baht, which is the highest proportion, followed by house rent. Expenses related to home repairs and maintenance, including electricity, cooking gas Including home appliances, about 4,000 baht.
What’s interesting about the average total expenditure number is that when looking back at the Ministry of Commerce’s CPI calculation method, which adjusts the base year for calculating inflation every 4-5 years, it was found that the latest base year that the Ministry of Commerce uses for reference is 2019.
In that year, the base income the ministry used to survey data and average was households (having more than 1 member) with an income of 6,987–50,586 baht/month.
When compared to both data for June 2022, it’s nearly 160% of the lowest income earners that meet the CPI statistical criteria.
When the inflation in The United States of America or The United Kingdom was increase. Although the initial calculation method is not different from that used in Thailand, However, the products used in the calculation are not the same.
Don’t forget that inflation is calculated based on the consumer price index. which is calculated from the regularly public use products. Therefore, each country has different essential products. And it depends on the relevant agencies of each country to choose the product. including how to categorize it.
For example, in the case of the United Kingdom, The British Office for National Statistics classifies products into 12 categories.
Food and non-alcoholic beverages.
When looking at each product in the UK, it is found that some of the products have reached a higher price level than the overall average level.
In the United Kingdom, inflation was 9.4% in June 2022, while egg prices increased by 11.5%. Dairy prices increased by 11.3%.
One interesting point that BBC Thai has already picked up in previous articles is that food expenditures can be one indicator of how vulnerable a citizen is to inflation.
An analysis from the U.S. Brookings Research Institute showed that, by comparison, poor households were more affected by rising inflation than wealthy households.
The reason for this is because Low-income households in developing countries often spend more than half of their expenses on food. And the rising on global inflation right now is mainly driven by energy and food prices. As a result, they are affected more than wealthy households.
However, the increase in product prices might be good for developing countries. because the increase in food product prices is good for farmers. so, they can receive more income.
After all, most of the poor in developing countries are still more buyers than food vendors. Rising food prices are a risk of increasing poverty in low-income countries.