Economic slowdown, drought threat to hinder Thai economy in H2

The prospect of a domestic financial slowdown within the latter half of the year has been raised because of multiple factors, including potential drought, political uncertainties, and a sluggish world economic system, according to the Employers’ Confederation of Thai Trade and Industry (EconThai).
EconThai’s vice-chairman, Tanit Sorat, highlighted that the worldwide financial system is predicted to experience development of less than 2.1% in 2023. Factors corresponding to an incomplete recovery of the Chinese economy and a diminishing US market are anticipated to influence Thai exports negatively, resulting in an economic slowdown.
In April, the Commerce Ministry unveiled a seventh consecutive month of decline in the customs-cleared worth of exports, reflecting a 7.6% year-on-year lower, amounting to US$21.7 billion. Meanwhile, imports fell by 7.3% to US$23.2 billion, culminating in a commerce deficit value US$1.47 billion. This data indicates a continued financial slowdown within the country.
Another problem impacting the domestic economy is political uncertainty, particularly surrounding the potential for the Move Forward Party (MFP) and its seven political associates forming a new government, led by prime ministerial candidate Pita Limjaroenrat of the MFP. Any delay in authorities formation can doubtlessly damage the business sector’s confidence, leading to an economic slowdown.
“Foreign investors have delayed their investments right here as a outcome of they need to know the funding insurance policies of the new authorities and ensure that the brand new administration is not going to change the policies initiated by its predecessor,” mentioned Tanit.
Mold expressed concern that a slow course of in forming a new authorities would possibly affect the finances planning for fiscal 2024, which might impression makes an attempt to stimulate the domestic economy and probably exacerbate the ongoing financial slowdown.
Drought is another issue that can create pressure on the financial system, as water shortage would decrease the quantity of agricultural produce, and increasing prices would negatively affect the export sector. “Drought is predicted to last from 2023 to 2026 as a result of El Niño and the impression of climate change on many international locations, including Thailand,” Tanit stated.
However, EconThai has not noticed a coherent technique to arrange for potential drought conditions and safeguard domestic food security. The Joint Standing Committee on Commerce, Industry and Banking submitted a proposal to Prime Minister Prayut Chan-o-cha on May 31, hoping to collaborate with the federal government to mitigate any extreme impact caused by water shortages, reported Bangkok Post..

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