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Monitoring Impacts of Global Economic Volatility on the Thai Economy

October 8, 2013 Destination Thailand No Comments Email Email

All relevant government agencies are monitoring possible impacts of global economic volatility, especially the US government shutdown, on the Thai economy.
1327693143pThe issue was discussed at a meeting of the working group appointed to supervise Thailand’s economic policy management, chaired by Prime Minister Yingluck Shinawatra on 2 October 2013.

Governor of the Bank of Thailand Prasarn Trairatvorakul told the meeting that the US government shutdown would affect the American economy by only 0.1 percent in the third quarter of 2013. He believed that the situation would ease soon and that impacts on the Thai private sector would be minimal.

Secretary-General of the Office of the National Economic and Social Development Board Arkhom Termpittayapaisith said that the global economy was starting to show signs of recovery. As a result, purchasing power overseas would pick up in the fourth quarter and continue into 2014. This would contribute to Thai exports. However, he stressed the need to monitor closely three major issues: the US decision to reduce its quantitative easing, the US government shutdown, and the economic situation in the European Union.

According to the Fiscal Policy Office, the shutdown of the US government has led to stronger capital inflows and strengthened the baht value. It said that foreign investors have continued to invest in Thailand’s debt securities market.

Concerned about the operations of small and medium-sized enterprises (SMEs) amidst the rapid changes in the global economy, the Prime Minister instructed the Office of the National Economic and Social Development Board and the Ministry of Finance to form a working group to address the problem and help SMEs. The working group will also set the policies and directions for SMEs.

Director-General of the Department of Internal Trade Wiboonlasana Ruamraksa said that efforts have been made to ensure that prices of consumer goods would be fair for consumers. Manufacturers have also been asked to cooperate in maintaining the prices of their products. The Department has joined forces with major manufacturers in organizing activities until the end of 2013 to reduce prices of a number of items, such as rice, eggs, cooking oil, sugar, vegetables, and meat.

Since many areas in Thailand have been affected by floods, the Prime Minister was concerned that prices of certain food products might increase and affect consumers. She instructed the Ministry of Commerce and other agencies involved to focus on price monitoring in order to ensure that consumers would not be exploited.

According to statistics compiled by the Ministry of Commerce, Thailand’s consumer price index is likely to decline. It dropped from 3.30 percent in 2010 and 3.80 percent in 2011 to 3 percent in 2012. From January to September 2013, the consumer price index stood at 2.36 percent.

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