On Thailand's negative inflation.

Thailand 0% to even slightly continued negative inflation is not good. Healthy economies usually aim for about 2% inflation. As this is enough to keep money circulating but not so high that it erodes purchasing power quickly.

0% inflation sounds neat, but it often signals weak demand. This can mean slow growth, low investment, businesses hesitant to expand, and wages staying stagnent...it increases the risk of slipping into deflation.

Deflation is trouble as people then just delay purchases, companies cut prices, profits shrink, layoffs start...

Debts become costlier, as with 0% or negative inflation, the real burden of debt rises — for governments, companies, and already heavily indebted Thai consumers.

Paul Renaud
www.thaistocks.com