The Israeli-Palestinian conflict is not expected to have a major impact on Thailand’s economy, particularly in terms of tourism and exports. The global economy is experiencing a slowdown, but Thailand’s economy is expected to recover through private consumption and the service sector, driven by an increase in international tourists and a rebound in exports. Inflation is also expected to accelerate in Thailand, but the policy interest rate will likely remain unchanged. The value of the Thai baht is expected to strengthen against the US dollar due to the country’s economic recovery and the Federal Reserve’s looser monetary policy.
Analysis: Limited Impact of Israeli-Palestinian Conflict on Thai Economy
According to the analysis by SCB EIC, the Thai economy is not expected to be significantly affected by the current Israeli-Palestinian conflict in terms of tourism and merchandise exports. Despite the global economic slowdown, Thailand’s economy is projected to recover through private consumption and the service sector. There is an expectation of increased international tourists from ASEAN, East Asia, and Europe, as well as a resurgence in domestic tourism. Additionally, there are signs of recovery in the export sector, especially in energy-related products.
Thai Economic Trends
The recovery of the Thai economy will primarily depend on private consumption and the service sector. While the number of foreign tourists visiting Thailand was slower than anticipated due to the loss of confidence among Chinese tourists and the Israeli war, domestic travel among Thai tourists is expected to remain high. In the fourth quarter, there is an anticipated increase in foreign tourists from ASEAN, East Asia, and Europe.
Expectations for Exports and Inflation
There are positive indicators for the expansion of Thai exports in the fourth quarter. The prices of export products, particularly energy-related ones, are expected to rise. However, inflation in Thailand is predicted to accelerate due to factors like drought, limited agricultural exports, and OPEC+ production cuts. The policy interest rate in Thailand is expected to remain unchanged at 2.5% throughout the upcoming year, supporting the stability of the financial sector. The Thai baht is also expected to strengthen against the US dollar.
Source : SCB EIC sees little impact of Israeli-Palestinian war on the Thai economy
