The Israeli-Palestinian conflict is not expected to have a significant impact on Thailand’s tourism and merchandise exports. Thailand’s economy is expected to recover through private consumption and the service sector, with an increase in international tourists and a rebound in exports. Inflation in Thailand is expected to accelerate, and the policy interest rate is predicted to remain at 2.5%. The value of the Thai baht was not significantly impacted by the conflict, thanks to dovish comments from the Federal Reserve and capital inflows returning to the Thai bond market.
According to SCB EIC’s analysis, the current Israeli-Palestinian conflict is not expected to have a significant impact on the Thai economy in terms of tourism and merchandise exports. The global economy is experiencing a slowdown, with the US economy showing clear signs of slowing down in the fourth quarter. The global inflation rate is expected to accelerate in the coming years, with central banks in the US, Europe, and the UK keeping interest rates high until mid-2024.
Thai Economic Trends
The Thai economy is expected to recover through private consumption and the service sector. There is an anticipation of an increase in international tourists from ASEAN, East Asia, and Europe in the fourth quarter, as well as a resurgence in Thai domestic tourism. Export of Thai products is also expected to expand further due to increased prices and the low base factor.
Inflation in Thailand is Expected to Accelerate
Inflation in Thailand is expected to accelerate due to factors such as drought, limited agricultural exports, and OPEC+ production cuts. The interest rate policy in Thailand is predicted to remain at the current level of 2.5% throughout next year to support the stability of the financial sector. The Thai baht is expected to strengthen against the US dollar due to the country’s economic recovery and the looser monetary policy of the Federal Reserve.