Conflict Russia-Ukraine could cost the Thai economy around 244 billion baht

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A study by the University of the Thai Chamber of Commerce (UTCC) has reported that the conflict between Russia and Ukraine could cost the Thai economy around 244 billion baht and hinder GDP growth for 2022.

According to UTCC president Thanavath Phonvichai, the Russia-Ukraine conflict has a direct impact on trade and tourism between Thailand and both countries, while the increase in energy prices will affect the market and the country’s inflation rate. The UTCC believes that the crisis will cost the economy around 244.70 billion baht and slow the country’s growth to around 2-3 per cent if the conflict continues throughout the year.

The University of the Thai Chamber of Commerce is a private non-profit higher education institution in Bangkok, Thailand. The university’s origin dates back to 1940, with the foundation of the College of Commerce in Bangkok. In 1984, the college was granted full university status under its present name.

The UTCC president is concerned that Thailand will enter a period of stagnation and inflation due to the conflict and various factors such as the spread of the Omicron variant. However, he stated that there are numerous unpredictable variables and that it is too early to draw such a negative conclusion. Therefore, the UTCC will maintain its economic growth prediction from November of last year and will wait some time before issuing a new revision, possibly in April.

ing to Deputy Prime Minister and Commerce Minister Jurin Laksanawisit all ministries are now working on ways to dampen the rising costs of energy products and consumer goods to spare both producers and consumers the worst of the economic fallout resulting from the conflict. He added that the administration is also putting extra resources into enforcing laws prohibiting price gouging for all products.

The UTCC president said that the impact of the Russia-Ukraine conflict on the world economy is projected to last 1-3 years and the situation remains difficult to predict. The prolonged conflict could increase global crude oil prices to 200-300 US dollars per barrel which would severely affect every economy in the world. Citing these possibilities, he stated that the government must select appropriate stimulus measures to prevent the economy from contracting while keeping the foreign exchange rate at 32.50-33 baht per dollar to ensure Thailand’s competitiveness in international trade.

The Thai government has promised to do its best to keep the price of diesel at no more than 30 baht/litre for as long as possible, said Prime Minister Prayut Chan-o-cha at the Government House, after chairing a meeting of the National Energy Policy Committee last Wednesday.

According to Ratchada Thanadirek, deputy spokesperson for the Office of the Prime Minister, the proposed cut will apply to diesel with a sulfur content not exceeding 500 parts per million (ppm) or Diesel B10.

Mirko Bennardo
Author: Mirko Bennardo

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