World Bank economist urges help for poor

Kirida Bhaopichitr, a country economist for the World Bank, said the government could introduce measures to directly help low-income persons who are affected by skyrocketing prices of goods and services, rather than macro-economic measures that would result in widespread effects.

The government might initiate a work-for-food programme, like one in Indonesia, which allows consumers to join who are really in trouble with the escalating high cost of living. The programme would provide jobs such as road excavation in exchange for food and money.

Moreover, the government might start a free school lunch programme for children.  

Kirida said parents are likely tocut educational expenses when they lack money.

"The government should introduce specific measures that really help lower income people, otherwise high-income people would be the ones who benefit from more general measures," she said.

The crude oil price relentlessly broke a historical record again at US$127 (Bt4,124) a barrel, putting additional pressure on the costs of production.

The economist said that soaring food prices, rather than oil prices, have hit low-income earners hard. The Blue Flag Program of cheap consumer goods would benefit the real target if it were located in low-income communities.

Kirida said inflation has not yet reached a peak level because oil and commodities prices continue to escalate, which will adversely affect household saving.

The World Bank projected that headline inflation will be higher than 5 per cent this year, but core inflation remains in the target area of 3.5 per cent.

Kirida expressed concern over the current account balance because exports could drop from a global economic slowdown affected by rising oil prices.