How Inflation happens (สาเหตุ เงินเฟ้อ, which is the term in Thai) is a big question now. Many factors contribute to Inflation, but the two main categories are expense and demand-pull factors. When there is a rise in spending in the economy, producers are forced to boost prices to increase profits. Pricing occurs when growers increase their prices as a result of rising costs. Your price of living can increase over time due to Inflation, which impacts individuals ranging from ordinary people to enterprises and the share market.

Consumer Price Inflation

The most frequent reason for price increases is customer inflation. It happens when buyer consumption of goods and services grows too much and exceeds supply. While this happens, producers cannot keep up with demand and may lack adequate time to set up the necessary fabrication to increase supply.

How Inflation Happen?

Inflation is primarily brought on by cost-push and demand-pull. Both contribute to the general increase in an economy, but they exert pressure on prices in unique ways. Consumer demand can push prices up under demand-pull conditions, while supply costs can push prices up under conditions of cost-push.

The Present Rate Of Inflation

We start with a “commodity market” of items and services to figure out Inflation. The most current inflation data always refers to the prior years because this obvious sign lags. Before accounting for Inflation, the all-assets index rose 9.1% over the previous 12 months. The equilibrium price of this “fresh market” is evaluated from monthly instalments. This bag is not intended to be comprehensive; instead, it is supposed to represent a percentage of the services and goods urban households customarily use.

What Factors Lead To Inflation?

Supply and cost increases are two of the most frequent causes of Inflation, though there are other causes. The reasons for the consumer price index in 2022 are a little more complicated and include the public’s reaction to the disease outbreak and unexpected sales rise as the coronavirus lockdown limitations loosened and layoffs spread across the nation.

Conclusion

The average annual rate of Inflation in our economy is around 2%. This implies that, barring a situation where your money earns a value rate higher than or comparable to Inflation, your money loses value annually under average public finances.

Hence, seeing the scenario in the current times, it is sure that the inflation is going to go up further.