Since when did we start paying more for the same items that used to be cheaper?

This is mostly related to a phenomenon called inflation, which is an economic occurrence where the prices of goods and services tend to rise continuously.
From another perspective, inflation is when the value of money decreases gradually, meaning that the money in our hands can buy less.

Suppose you have 50 baht.
In the past, you could buy many bowls of rice, but today, that same amount of money can only buy one bowl.
This reflects that inflation is the pressure that makes things more expensive and the value of money decrease.
Looking ahead, in several decades, a bowl of rice might cost 100 baht for sure.

Understanding what inflation is very important because it’s not just a number in economics.
It affects our investment decisions, both in the stock market and in personal financial planning.
When we assess whether inflation will go up or down, it often causes the stock market to move accordingly.

An interesting point is that not everyone is affected equally.
Entrepreneurs and vendors who can adjust their prices according to the situation often benefit.
But salaried employees are different.
Even if their salaries increase, that increase usually isn’t enough to keep up with inflation.

Let’s look at the causes of inflation.
After the global economy begins to recover, demand for goods rises sharply.
But production cannot keep up with the pent-up demand for a long time.
Additionally, production costs increase due to global commodity prices such as natural gas, crude oil, coal.
Supply chain issues, like shortages of containers and semiconductors, are also significant factors.

Generally, inflation results from three main points:
First, increased demand that exceeds available goods.
Second, rising production costs.
Third, the government printing more money.
Currently, the main drivers are the recovery of major economies like the United States, unexpected strong growth, and changes in government and private sector spending.

Looking ahead, many signals suggest that the global economy may enter stagflation, a situation no one wants to see—high inflation combined with stagnant economic growth.
If Thailand’s economy enters this state, our purchasing power will decline.
Businesses will struggle to sell, leading to price cuts, lower profits, no expansion, layoffs, higher unemployment, and ultimately, business closures.
All of this results in slow GDP growth.

Inflation clearly impacts our daily lives.
Living costs rise, people have less purchasing power, entrepreneurs face obstacles, and the overall economy slows down.
Prices of essential goods like meat, oil, and fresh vegetables increase noticeably.

The opposite of inflation is deflation, which is a continuous decrease in prices.
This is a different problem altogether.
When inflation occurs, businesses and shareholders may benefit, but fixed-income earners and creditors are at a disadvantage.

To cope with inflation, many choose to plan their investments.
Instead of leaving money in low-interest savings accounts, they consider investing in stocks, mutual funds, real estate, gold, or floating rate bonds (Inflation-Linked Bonds).
Gold, in particular, is considered stable because its price often moves in the same direction as inflation.

Sectors that benefit from inflation are interesting.
Bank stocks benefit from increased interest rate spreads.
Insurance companies also gain higher returns from bond investments.
Food stocks are important because food is a necessity, and producers can adjust prices accordingly.

In summary, inflation is part of the economic cycle.
At moderate levels, it helps the economy grow.
But if it exceeds a certain point, it becomes hyperinflation, which is problematic.
Smart investors can profit from this situation by choosing assets that benefit from inflation.
The key is to stay informed about news and events that can change inflation rates and impact our investments.