Thailand may miss the government’s forecast of 3.5-4.5% economic growth in 2022, pushed by oil-driven inflation due to the war in Ukraine, with record increases in general spending prices.
A recent study by the University of the Thai Chamber of Commerce (UTCC) reported that the conflict between Russia and Ukraine could cost the Thai economy about 244 billion baht and hinder GDP growth for 2022.
Large oil importers such as India and Thailand will be the hardest hit by the ongoing Russia-Ukraine war among Asia-Pacific countries, the S&P Global Ratings recently reported.
“The biggest risks of the Ukraine conflict are market volatility and high commodity prices; Emerging economies, including large energy imports, are most at risk, ”he said.
“India and Thailand will be the biggest oil importers and the biggest losers among the larger Asia-Pacific countries,” S&P added.
Food prices are rising
According to the IMF, Russia and Ukraine are major producers, and disruptions have pushed up global prices, especially for oil and natural gas. Food costs rise with wheat: About 30 percent of world wheat exports and 18 percent of corn are responsible for these two countries, most of which are shipped through the Black Sea port, which is now closed.
However, the difference in food should also be taken into consideration. Wheat makes up about a quarter of the food in Europe, whereas in Southeast Asia, wheat for rice is only 7 percent to 42 percent, for which price increases have so far been relatively modest.
Asian food price pressures should be reduced through greater reliance on rice rather than local production and wheat. Expensive food and fuel imports will drive up consumer prices, although subsidies and price hikes for fuel, food and fertilizers may reduce the immediate impact কিন্তু but with revenue expenditures.
How the Ukraine war is raging around the world – Thai News (Thailand-business-news.com)
Sanctions will hit outside Russia as well
Overall, Russia and Ukraine are relatively small economic players in Southeast Asia, with Russia accounting for only 0.64 percent of global trade with the region and Ukraine only 0.11 percent, according to ASEANstats.
However, impending sanctions against Russia will hurt not only Russia, but also the United States, the West and emerging markets, especially if they rely heavily on exports of goods and services like Thailand.
The war in Ukraine will trigger a huge negative supply shock 8 / … This push will reduce growth and increase inflation at a time when inflation expectations are already becoming unrealistic.
Russia’s War and the Global Economy by Nuriel Rubini – Project Syndicate (project-syndicate.org)
Restoring tourism takes a hit
Tourism will also suffer because of the war and sanctions: If the Russians cannot visit because of the war, it could cost about 0.2 percent of Thailand’s GDP, said Pisit Puapan, executive director of macroeconomic policy at the Fiscal Policy Office.
About 1.5 million Russian tourists visited Thailand in 2019 before the epidemic, making it the third largest source of tourism revenue for their country.
When the country began lifting its Covid-19 travel ban in November, the Russians were the largest group of tourists visiting Thailand. Following Russia’s invasion of Ukraine in February, several Russian airlines canceled flights and global payment companies suspended services, imposing a number of international sanctions on businesses and banks.
From November 1St.When Thailand reopened its doors to tourists with the “Thailand Pass” under the “Test and Go” and “Sandbox” programs, more than 63,000 Russians arrived in the country, generating about 4.1 billion baht in revenue.