Thailand Manages to Neutralise Impact of US-China Trade War

10-Aug-2019 Intellasia | Plenglish | 6:02 AM Print This Post

Thailand began to take radical measures to neutralise the impact of the US-China trade war and its repercussions on the economies of Southeast Asia and a large part of the world.

Experts cited on Thursday among the first measures adopted in this regard the unexpected decision of the Central Bank to cut the benchmark interest rate by 25 percent, the first cut in almost four years.

In addition, announced was the request of Finance minister, Uttama Savanaya, to the State Enterprise Policy Office (SEPO) to accelerate the disbursement of an additional 4.2 billion dollars of investments in State enterprises.

SEPO was also instructed to work with other agencies to eliminate any obstacles to investments, Savanaya explained.

On the other hand, deputy prime minister Somkid Jatusripitak warned that there are three external factors that could harm the Thai economy: the United States-China trade war, protests in Hong Kong (due to the effect on stock markets), and devaluation of the Chinese yuan.

This last factor could seriously harm exports, one of Thailand’s main sources of income. According to the Siam Bank Economic Intelligence Centre, due to the aforementioned issues, foreign sales will fall by over three percent in 2019.

Thailand’s economy grew 4.1 percent in 2018, but that pace will slow down in 2019 and 2020, as global and regional trade tensions rise, experts from the International Monetary Fund pointed out in Bangkok a few days ago.

The IMF recommended the country adopt a combination of expansive policies consisting of the judicious use of fiscal space, devising reforms and achieving coherent monetary easing.

They also recommended an anticipated increase in public investment in the 2020 fiscal year, supported by stronger management, capable of catalysing private capital and increasing productivity.


Category: Thailand

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