Thai government urged to examine low inflation

BANGKOK, May 3 (TNA) - The Thai government has been urged to look into the cause of the country's recorded low inflation in 29 months last month to avoid the sluggish Thai economy. Director of the Center for Economic and Business Forecasting of Bangkok-based University of the Thai Chamber of Commerce Thanawat Polvichai on Wednesday called for the Ministry of Commerce to examine the cause of a drop in Thailand's inflation from 3.45 percent in March to 2.47 percent in April, the lowest level in 29 months. Thanawat said if last month's drop in the country's inflation was due to post-flood rehabilitation or government policies, then the national economy was heading toward a positive direction, but if the drop in inflation was due to local consumers’ lack of purchasing power or oversupply on the domestic market caused by a fall in Thai exports, then the national economy was shrinking, like the South Korean economy. Thanawat recommended if the Thai economy was found to be contracting, the government should then encourage more lending from local banks, particularly some 300 billion baht soft loans to victims of the country's flooding crisis late last year, in order to propel the national economy. (TNA)