Can of beans raises questions in the real cost of living debate for foreigners in Thailand. Viral TikTok by Irish-UK tourists highlights ฿420 price tag shock, sparking concerns over rising living expenses despite official low inflation data. Government urged to act.

A can of Heinz Beans went viral on social media site TikTok this week. Two young tourists from Ireland and the United Kingdom expressed horror at the price tag of ฿420. Although probably an error or mistake, it comes with a growing conflict between reports from ordinary people including expats and Thais about the cost of living and official Thai government data. It came in a week in which the Ministry of Commerce confirmed 0% inflation for the first six months and when June’s inflation rate was only 0.67%, defying a Reuters poll which predicted 1.13%.

Mark and his girlfriend Nadine were tourists in Thailand this week. A TikTok video they made at a supermarket went viral. It appeared to show a can of Heinz Beans for sale with a price tag of ฿420. Certainly, this seems to be a big mistake. However, it raised the question of the real cost of living for foreigners in the kingdom. It came in the same week as the Ministry of Commerce unveiled a 0% inflation rate for the first six months of 2024. (Source: TikTok and Ministry of Commerce)

On Sunday, a deputy spokesman for the smaller opposition Thai Sang Thai Party called on the government to act regarding the cost of living in Thailand.

The small party, formed by former Pheu Thai Party stalwart Khunying Sudarat Keyuraphan, broke ranks with her former party last year when it entered the coalition government.

Opposition demands urgent government action addressing real rising living costs in Thailand in particular for people living in the poorer northeast

It is now firmly part of the opposition. On Sunday, Nong Bua Lamphu’s Thiwakorn Surachan warned the government that people are in difficulty. He said prices are rising ahead of income. Trade was on the wane and the ordinary people of northeastern Thailand were more insecure.

Mr Thiwakorn said it was disappointing to see a Pheu Thai-led government not being able to tackle the problem. He said it was just the same as General Prayut Chan-ocha’s government. Certainly, this could be just another political attack from the opposition. Politics as usual, ubiquitous in all countries

However, there is increasing evidence of a dichotomy between Thailand’s official inflation data and what is really happening on the ground.

Rising costs amid timid inflation data highlights the financial dichotomy of ordinary Thais struggling to live versus government’s official economic picture

For instance, a UK-Irish couple holidaying in Thailand were startled by the outrageous price of a can of Heinz Beans compared to back at home.

A 415-gram can was found in a leading supermarket for sale at a price of ฿420. It may have been a mistake, given that the price in the United Kingdom is something like ฿36.83 each or $1 approximately.

It comes as the latest data revealed for June in Thailand showed an official 0% inflation rate for the first half of the year.

At the same time, the headline rate was only 0.46%. In turn, this followed the country’s first positive inflation reading in April when it rose to 0.19%. There was a surprise in May when it shot up to 1.54%. This followed an extended period of official negative inflation rates.

Thailand faces unique economic challenges but inflation rates contrast sharply with global trends. Indeed, it’s one very welcome contrast for foreigners

Coming at a time when Turkey recorded a 71.6% rate in June and Argentina is projected to have a 140% rate in 2024, Thailand should count itself lucky. However, not so.

Certainly, the current financial leadership at the Ministry of Finance appears to encourage the Bank of Thailand to allow a higher target rate. In short, this may justify a lower interest rate. Nevertheless, this is being refused by central bank planners. 

In short, Governor Sethaput Suthiwartnarueput regards price and financial stability as a key anchor for Thailand. For expats, this is the right approach and welcome.

Nevertheless, Thailand’s economy is suffering from a lack of growth. In effect, the country is suffering from underlying economic malaise. This is linked with 90.8% of GDP in private sector debt, an ageing population and an outdated industrial base.

Similarly, Thailand’s education system is being shown up by advances in other Southeast Asian countries. Particularly Vietnam.

Thailand’s lack of capacity to speak English is another key impediment.

Economic growth in Thailand is hindered by high debt levels, an ageing population, and an outdated education system, severely curbing its GDP performance

Previously, the country had enjoyed strong gains in personal foreign investment, in particular from tourism and foreigners moving to live in Thailand.

However, the country is gradually losing ground. For instance, there is a confused regulatory structure and a lack of clarity on visa regulations.

In addition, the controversial move by the Thai government to extend its tax base by targeting foreign residents may have unintended consequences.

All this comes with lagging growth. Thailand is fighting for 2.2-2.4% growth in 2024 while Vietnam is aiming for a 7% GDP gain. The kingdom’s economy is the ‘sick man’ of Southeast Asia.

However, despite all that, there has been a creeping rise in the costs of living for foreigners. This is in contrast to the data showing ultra-low inflation. Both property prices and the cost of eating out have also risen unusually quickly in Thailand in recent years.

To such an extent that it is no longer significantly cheaper than in many Western countries. Particularly in countries such as Greece and Spain, which are key targets for those seeking a retirement home.

Rising living costs in Thailand for expats challenge the country’s appeal, amid a confused regulatory structure, higher property prices and creeping taxation

Presently, the Thai government has had some success in targeting the cost of living issue. The Pheu Thai-led government provides support for electricity costs for both homeowners and businesses as part of its plan.

At the same time, it has insisted on pursuing its policy of wage increases.

Combined with industrial output dumping from China, where firms are subsidised by the communist government, this has led to significant factory closures in recent months.

Certainly, the country has experienced a fall in manufacturing output which has played into wages, in particular in relation to overtime payments.

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Therefore, we get this dichotomy between the Bank of Thailand and Ministry of Commerce data on prices and a different story entirely from the public.

Mr Poonpong Naiyanapakorn is the Director-General of the Trade Policy and Strategy Office at the Ministry of Commerce. He announced the June inflation figure this week. At 0.62%, it contrasted sharply with the 1.12% projected by a Reuters poll.

Government and central bank inflation data and the ‘feeling on the ground’ lead to public confusion and renewed speculation about economic policy direction

The senior officials attributed the fall to lower fresh food prices. For example, an end to the hotter weather was conducive to stronger agricultural output. Also, the base was higher. In addition, there were continued electricity subsidies.

Core inflation for June was only 0.36%.

Furthermore, inflation for the third quarter is expected to be below the second quarter. Afterwards, inflation may rise in the fourth quarter to 1%. Certainly, only then will it reach the Bank of Thailand’s target range of 1-3% per annum.

Nonetheless, there continues to be tension between the government and the central bank over the issue. The government wants to see lower interest rates. In short, it says very low inflation figures show an economy that needs impetus. Indeed, one finance minister, last week, linked higher inflation with higher growth.

This has caused some observers to speculate that the government may move to withdraw energy supports. At the same time, ministers are pushing for faster and larger wage increases.

Of course, business leaders have told the government that this would be disastrous. In effect, it would erode Thailand’s competitiveness further.

Present speculation over a potential government withdrawal of economic price supports amid ongoing tensions with the central bank on inflation and rates

Certainly, there remains the question of Thailand’s real inflation level.

Firstly, we would need to look at the elements in the central bank’s analysis and the government’s. Another key factor may be that the cost of living for expatriates and foreigners in Thailand differs considerably from the average Thai person.

William Russell, the respected life insurance firm offering life coverage to expats published a survey. Based on 2022 data it showed that Thailand offers a 34.2% saving to UK retirees in terms of the cost of living. Similarly, for the United States, the margin was wider at 43.87%.

Meanwhile, back to the Heinz Beans conundrum highlighted by Mark and Nadine this week in their TikTok video. The message is clear. Shop around for everything in Thailand. Never take prices at face value.

In the video, Nadine asks her boyfriend Mark: ‘You want your Heinz beans in Thailand? Only ฿420.’

Mark is shocked and suggests it is the same as AUS$20.

In fairness, that would be ฿492 but close enough. The couple live in Australia and were on a holiday to Thailand. They are from Ireland and the United Kingdom.

Viral TikTok on Heinz Beans price in Thailand among tourist couple sparks discussion about the high cost of Western goods and the need for savvy shopping

However, a quick check shows a 6-pack of 415gm Heinz beans in the United Kingdom costs £4.75. That is ฿221.60 or ฿36.93 per can.

Certainly, the listed price for a four-pack in Thailand is ฿420. In short, this is already 284% of the UK price. At the same time, a single can is sold on Lazada for ฿75. Of course, the offer may be a ‘loss leader’ retail tactic often used in the UK.

Certainly, an 8-pack of the much-loved staple will set you back $24.95 stateside. That is ฿114 a can, just a little bit higher than the price in Thailand.

This simply means that Western products for expats in Thailand are more or just as expensive.

Another interesting comparison is the Big Mac index. The famed American burger is ฿149 in Thailand, ฿220 for a set. The burger alone is ฿228 in London and ฿190.70 in New York. Notably, it’s somewhat cheaper in more secondary locations in the United Kingdom and the United States.

Big Mac index reveals price comparisons of popular American burger across Thailand, UK and United States

Obviously, we are not naming the supermarket visited by the Irish UK pair this week.

However, there is a strong probability that this was a complete mistake.

The shop label suggests price per unit but this could have meant a price for the 4-pack series at ฿420 which would have matched the province in the United States.

In conclusion, there are a variety of variables.

Although Thailand’s official inflation level is low, the cost of living here for expats who consume Western fare may well be higher. Certainly, Thailand is moving towards becoming a more developed, Western-style country.

In short, this is the price being paid as successive governments push to transform the kingdom into a developed economy.

Consequently, the days of Thailand as a tax-free, low-cost haven for older foreigners could well be on the way out.

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Further reading:

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New plan for the Thai economy could see an elite foreign visa scheme generate up to 6% of GDP

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Plan to allow high tech and skilled foreigners to live and work in Thailand for up to four years