Mr. Kriengkrai Thiannukul, Chairman of the Federation of Thai Industries (FTI) Said that the Tom Yum Kung crisis 25 years ago was caused by the bursting of the real estate bubble in Thailand and its impact spread to other countries. Most of the severely affected businesses are large companies that borrow low interest loans from foreign countries. and financial institutions while SM entrepreneurs and other sectors not affected much
When the last straw was on July 2, 1997, Thailand floated the baht, causing the loan to expand twice, causing serious pain to large companies. But on the other hand, the weak baht also encourages better exports. which is the key to helping the economy start to recover after
“Today marks the 25th anniversary that Thailand has to face a heavy economic crisis again. which are different symptoms from the past and the solution to the problem is different The crisis we are facing today is inflation with a global scale of impact. which began to arise from the demand that came back after the epidemic situation of covid causing the price of the product to begin to rise.”
from the original production And transportation has to be halted or slowed as city lockdowns and countries shut down. When the situation of the covid-19 epidemic began to unravel the rapidly returning consumer demand. It started to see the trend of rising oil prices at 70-80 dollars per barrel. From the time of the coronavirus it dropped to $30 a barrel.
From Covid to Inflation
In addition, in 2021, the United States begins a plan to combat the economic impact of the coronavirus by injecting money into the system. issuing remedial measures Including the opening of the country to tourists, resulting in greater demand for oil. Oil prices have started to climb and commodity prices have signaled slight inflation.
Until February 2022, Russia, the top oil exporter of the world declare war on Ukraine As a result, the price of oil rose above $100 a barrel. If the situation is protracted, it will increase the high oil prices in the world market. and causing the cost of energy sector to increase exponentially Inflation affects the global economy, including Thailand.
“This time, inflation is affecting all sectors and affecting a wide range of people. small and medium sized company and the breakfast man Affected by the cost of living rising food costs While the Tom Yum Kung crisis, the most hurt groups are large companies.”
US inflation countermeasures
The US has taken measures to cope with inflation by announcing an interest rate hike of 0.75% and aiming for the full year interest rate to be 3.4%. Therefore, from now on, interest rates will be accelerated along with a policy to reduce the balance sheet. It’s called Quantitative Tightening (QT), a “reversible monetary liquidity” to reduce inflationary pressures that appear to be currently soaring.
Due to factors of shortage of production factors, labor, raw materials, production and rising oil prices causing the product price to rise including negotiating with OPEC countries to increase oil production to replace Russian oil prices and approval to use 1 million barrels of oil in strategic reserves per day to alleviate oil prices
To survive the business, risk management is required.
Inflation has become a global problem, putting pressure on the purchasing power of the people of the middle class and increasing costs for SMEs. which for the industrial sector has always been prepared to cope from the challenges that have arisen since the trade war between the great powers Covid-19 pandemic situation and conflict wars between geopolitics At present, the price of energy and the cost of imported raw materials are all higher, plus the depreciation of the baht. This causes entrepreneurs to have a careful risk management.
There must be an efficient energy management plan. resulting in the lowest production costs, such as increasing the proportion of alternative energy It is cheaper to use electricity during off-peak periods. In the end, the current Russo-Ukrainian war situation be protracted It is expected that throughout this year will face high oil prices. It is expected that diesel prices with a new price ceiling set at 35 baht per liter will have to expand the ceiling further in the future. If the price of oil continues to rise Operators also need to manage risks. Plan carefully and monitor the situation closely.
“No one can tell when the Thai economic situation will begin to recover. but from the full opening of the country including easing the measures to wear masks It is expected that in the second half of the year there will be more tourists arriving in the country. It is estimated that there will be 6-8 million tourists throughout the year, which is a return to restart the tourism sector engine to support the export sector. Generate money into the country and make the GDP of Thailand better.”
As for the export sector, it is also necessary to keep an eye on the protracted and potentially escalating war situation. As inflation is now depressing the purchasing power of global consumers, orders have begun to wane in late Q2, with the exception of the food industry’s only growth in exports. It is expected that the whole year will be at 1.2-1.3 trillion baht, an increase of 20% from the previous year if the overall export sector in the second half of the year slows down not much And tourism meets the target and makes a lot of money. GDP this year is expected to be at 3.0%.