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Russo-Ukrainian War
affect the Thai economic recovery
Thai Rath Edition
28 Feb 2022 07:02
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“Russian bombing of Ukraine Over 100 dead in battle,” a giant headline appeared on page 1 of the Thai Rath newspaper on Friday, February 25, 2022, officially reflecting Russia's special military action against Ukraine. After the tension between the two countries and their supporters continued for a while.
A shocking statement issued by Russian President Vladimir Putin in the early hours of Feb. 24 (local time) said there was no other option.
In addition to the commencement of military operations against Ukraine
to protect people who are being bullied
genocide in an eight-year campaign of violence in eastern Ukraine to curb Ukraine's military influence
It freed Ukrainian politics from a far-right authoritarian government.
during the issuance of the statement
The sound of explosions in 10 Ukrainian cities continued to sound.
The explosion didn't just kill people and property.
But it also affects the money market - capital markets around the world who are worried that the conflict will escalate.
The Thai stock market during trading on Feb. 24 dropped as low as almost 40 points until the market closed down to negative 33 points, while crude oil prices rose past 101 dollars per barrel already.
As for the price of gold in the country, there has been a change of up to 17 times. Gold bullion selling price of gold baht touches 30,000 baht.
in a world connected as one
The tremors hit the Ukrainian-Russian mainland.
How does it affect Thailand, which is more than 7,000 kilometers away?
Please follow from this week's analysis.
Kittinan Yingcharoen
, Director of the Office of Overseas Trade Promotion in Moscow, Russia
The situation between Russia and Ukraine
So far, it's not very worrying.
because they haven't been hit hard
Thai and global trade with Russia continues as usual.
And if the violence is more than this, it will affect the world.
Not just Thailand, for example, if the United States and its allies implement full sanctions on Russia.
It is forbidden to trade with Russia.
as it did with Iran
Every country that trades with Russia will also be affected.
or if measures to limit the export of technology-related products such as semiconductors
Mobile phones, etc. Countries that export these products to Russia will also be affected.
But it believes that the United States and its allies will not impose a ban on Russia's access to international money transfers (SWIFT), which would prevent Russia from using the ruble for international financial transactions.
and will affect trade immediately
Because cutting Russia out of SWIFT would also affect the United States and its allies.
Like pinch a nail that hurts the flesh
because the payment will not be received from Russia at all.
It is currently watching how the United States and its allies will apply sanctions against Russia.
from before
has boycotted individual
and prohibited doing business with two Russian banks that testify
Defense support
and technology development
It's not a typical commercial bank.
“If we take measures to squeeze Russian commercial banks, it will definitely affect trade, but the Commerce Minister has ordered the Ministry of Commerce to set up a warroom to closely monitor the matter.
including discussing with the private sector
To assess the situation and prepare to find measures to reduce the impact for Thai entrepreneurs, such as preparing logistics
If the situation worsens to the point that the shipping routes are closed.
But believe that the situation should not be prolonged because NATO (Nato-North Atlantic Treaty Organization
The military alliance has members:
United States, United Kingdom, France, Canada, Spain) did not join Ukraine.
If Ukraine is isolated
Soon it will be exhausted to fight.”
However, every time Russia is sanctioned
Russia often retaliates
like when Russia occupied Crimea.
international sanctions against Russia
But Russia responded by refusing to import agricultural and food products from Western Europe.
This is an opportunity for Thai products to expand the market in Russia.
including instant food, canned food, canned fruit, fruit juice
For Thai businesses that invest in Russia, there are only 2 and they are not affected.
The exporters-importers are not panicking at all.
because international sanctions are not yet clear
There are only concerns that the ruble's value has fallen more than 10% against the US dollar and the euro, making imports more expensive and difficult to sell, but imports from all countries are equally affected.
Thai products therefore have not lost their competitiveness.
Another concern is
World oil prices have risen past $100/barrel.
which will affect the production cost of the product
global transport
but will affect the world
Danucha Pitchayanan,
Secretary-General of the National Economic and Social Development Council (NESDB)
As soon as Russia invaded Ukraine
have ordered the officials of
NESDB has compiled various impacts that will have on the economy of Thailand.
because it happened 2 days after
NESDB recently announced its gross domestic product (GDP) forecast for 2022, which estimates that the Thai economy in 2022 will expand 3.5-4.5%, with a median value of 4%. What issues are affected?
It is too early to assess the full-year impact at this time.
But still believe that Thai economic growth will not fall from the bottom base that expanded 3.5%.
The point to watch out for is how long this stressful situation will last.
If it ends early, there will be less impact.
But if it is prolonged, it will have a big impact.
Therefore, it is necessary to collect information that
What effects will the EU, US and other countries' sanctions against Russia have?
Including trade protectionism measures and other measures this year, what will affect Thailand?
At the same time, in forecasting the economic situation
NESDB has assessed under supporting factors.
Combined with limitations and risk factors that will occur this year.
which under the latest assessment announced
NESDB views that measures to support economic expansion remain within the framework that is related to external factors.
There will be a matter of recovery in the tourism sector, with 5.1 million foreign tourists coming to Thailand this year, and the continued expansion of the economy and the volume of global trade that has begun to ease from the distribution of vaccines and the relaxation of epidemic control measures. of Covid-19 around the world. It is expected that this year, the value of Thai exports will grow by 4.9%, in which in these 2 matters, it must be viewed as a stumbling block and not meeting the goals from the events of Russia and Ukraine in proportion. how much
In terms of limitations and risk factors
What will affect even more from the assessment is
An increase in inflationary pressures follows an increase in energy prices.
and commodity prices in the world market
Because Russia produces 11% of the world's oil demand.
Of course, the price of oil will rise for a while.
Along with the price of liquefied natural gas (LNG) that will affect the cost of electricity generation in Thailand increases.
Here, the Ministry of Energy
The National Energy Policy Council (NEPC) and the Energy Policy Administration (NEPC) must jointly consider whether some parts of the LNG power generation must be converted to oil or not.
Currently, there are 60 days of oil stock in Thailand that need to be procured more.
Chow Kengchon,
Executive Chairman, Kasikorn Research Center Co., Ltd.
Immediate effects of the Russia-Ukraine crisis
is an increase in energy prices
This can be seen from the price of Brent crude oil that has already surpassed the level of $100 per barrel.
While there is still a risk that oil prices may rise further.
for example
If the price of Brent crude in 2022 averages $100 versus $70 in 2021, then average oil prices will increase by more than 40 percent from the previous year.
This will gradually affect the price of goods and services until the inflation rate of the country.
If the price of oil weighs 10% in the inflation basket
A 40% increase in the average price of oil will bring inflation to the face of consumers.
There is a chance that it will be 2-3% higher than the case of non-crisis, which means that it will have a detrimental effect on the purchasing power of more consumers.
The Russian authorities will likely not change their course of action anytime soon.
As a result, the inflation rate that many countries have to face may be at a relatively high level for a period of time.
for the sanctions imposed by many countries on Russia
It would affect trade between Russia, especially the European Union (EU) and the United Kingdom (UK), possibly affecting the US and European economies.
Growing below 4% this year, the Russian economy itself.
It would expand below the 2.8 percent that the IMF had estimated, or it might even contract, even negative. While the impact on trade between Thailand and Russia in 2021, exports to Russia
declined to $725 million, while imports were worth $1.7 billion compared to before the coronavirus in 2019, leaving Thailand with a Russian trade deficit of about $1 billion. Thailand's main import from Russia is oil.
The main exports are motor vehicles and components, rubber products, canned fruit and air conditioners.
It is expected that Thai exports will decline from 2021.
Rising oil prices could cause Thailand to have a larger trade deficit with Russia than in 2021.
The impact on the exchange rate
Compared to the end of 2021, the baht still appreciates almost 3%. The direction of the baht in the future
There should be a major issue in whether the Thai economy's recovery is in line with expectations or not.
If the conflict in Ukraine can end soon
The baht may return to have support again.
will look at the baht at the end of this year at 32.0-32.5 baht per US dollar
But still have to closely monitor various economic numbers.
especially the price of oil
number of tourists
and the current account balance of the country
Phiriya Samphantharak
Digital Asset Investment Specialist
when a war situation
Investors will flee from risky assets.
to shift investments into safer or more stable assets
in the world of investment
Money invested in most or most of the digital assets in the hope of short-term speculation.
This market is therefore a speculative market.
which has high risk and volatility
So when the violence in Ukraine-Russia
Therefore, there is a downside hedge.
It was sold to diversify investments in gold and US dollar assets.
Both bonds and dollars
As a result, the price of digital assets, both Bitcoin and other cryptocurrencies, has decreased.
but the difference is
in the world of digital assets
The money that comes to invest in this market
Unlike other crypto coins, there is a special amount of Bitcoin, which is that there is no central bank.
no one can control
Not under the government of any country
or any private organization
Bitcoin is therefore an irrepressible financial system.
can't intervene
Therefore, we are seeing the demand for Bitcoin growing steadily.
because it is used as an asset for preserving value
Prevent the risk of interference or control by the government.
So, after the bitcoin price fell during the initial attack on Ukraine,
The price then bounced back higher than the drop.
While the price of crypto or other non-Bitcoin coins continues to decline.
Therefore, Bitcoin can be said to be a safe asset in the world of digital asset investment.
“Recent from the attacks in Ukraine
Both Ukrainian and Russian citizens withdrew money from banks.
to exchange for US dollars
Until Ukraine has to suspend / limit withdrawals
including suspending money transfers via internet banking
while Russia forbids the exchange of the US dollar
causing many people to try to hold bitcoins instead
because you can trade and exchange all the time.”
“Russia is the world's top bitcoin miner with 10-20%, while the United States is 20-30%. President Putin has said that Russia may turn to bitcoin in its financial system.
This was seen because he did not want the United States to intervene in Russia's economic and financial system.
without any interference or boycott
It is estimated that the Russian people are now holding the most bitcoins in the world”.
economic team
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