I just noticed that many people are still confused about inflation. To be frank, this affects all of our money. Let’s take a moment to understand what it really is.

Simply put, inflation is a situation where the prices of goods keep rising. It may seem natural, but in reality it means the value of our money decreases. Before, you could buy many bowls of rice with the same amount of money; today, that same amount of money only buys one bowl. That’s inflation.

The ones who benefit from this situation are merchants, business operators, and business owners, because they can raise their prices according to the circumstances. Unlike salaried workers, whose wages increase but not fast enough.

Let’s look at the causes. Inflation comes from several factors. First is increased demand, but production can’t keep up. This mostly happens after the economy recovers, when people have more savings and want to spend—this is called revenge spending. The second factor is higher production costs—gas, oil, steel, and copper prices have risen a lot—plus supply-side problems due to a shortage of shipping containers for transport and a shortage of semiconductor chips. The final factor is that the government prints more money, causing the amount of money in the system to become excessive.

The world is currently facing historically high inflation. Signals suggest we may be entering Stagflation, a bad situation. Thailand’s economy hasn’t reached that stage yet, but we still need to be careful.

One interesting story is that PTT has benefited enormously, because oil is expensive. In the first half of 2565, it had a net profit of 64,419 million baht, up 12.7% year-on-year. This is an example of how some companies can swim against the inflation tide.

There are also advantages to inflation: economic growth, business expansion, more employment, and a lower unemployment rate. But the downsides are higher prices, reduced purchasing power. If inflation becomes too severe, it’s called Hyper Inflation, which is a major problem.

What about deflation? It’s the opposite of inflation. Prices of goods keep falling, purchasing demand is low, and there isn’t enough circulating money. Producers don’t want to produce, and the economy stagnates. Both types are bad.

How does inflation affect daily life? It’s easy: things become more expensive—meat, vegetables, oil, and electricity. The cost of living rises. People buy less, businesses can’t sell as much, so they have to reduce production, cut staff, and unemployment rises. And in the long run, the country’s development of production capacity also slows down.

How do we measure inflation? Every month, the Ministry of Commerce collects prices for 430 items and calculates the Consumer Price Index (CPI). The year-on-year increase is the inflation rate. For example, in January 2567, CPI was 110.3, up 0.3% from the previous year.

Now the inflation rate has fallen for the 4th consecutive month, the lowest level in the past 35 months, because energy prices have decreased and fresh food prices have also fallen. However, some items still increased in price, such as fuel costs, electricity bills, and transportation fares.

When inflation is coming, what should you do? First, plan your investments. Put your money into assets that offer high returns—stocks, mutual funds, and real estate. You shouldn’t deposit money in banks because interest rates are low.

Second, avoid bad debt. Spend more tightly and buy only necessities. Third, invest in stable assets. Gold is a good option. Its price tends to move in the same direction as inflation. Fourth, keep up with news. Inflation changes all the time, so you need to stay informed.

During periods of inflation, which stock sectors benefit? Banks have the advantage because interest rates are on the rise, increasing profits from the interest-rate spread. Insurance stocks are also good—there are investments in government bonds, and returns increase along with inflation. Food stocks also have an edge because food is essential. People have to buy it, giving them price-bargaining power.

Another option is debt instruments—choose either Floating Rate Bond or Inflation Linked Bond, whose interest rates are adjusted according to inflation. Gold is also good for speculation: the higher the inflation, the higher the gold price tends to go.

In summary, inflation is a normal part of the economy. At an appropriate level, it can be good for growth. But if it becomes too high, it turns into Hyper Inflation, which is a problem. Unlike deflation, where the price level keeps falling continuously, both scenarios are dangerous for the economy. Investors should understand inflation, plan their investments appropriately, and keep up with the news so they don’t miss changes in inflation conditions.