Mideast conflict threatens Thai growth

The Bank of Thailand is warning the war in the Middle East could weigh on Thailand’s economy across multiple fronts, potentially dragging GDP growth below its 2% forecast for this year.

- SOMRUEDI BANCHONGDUANG

The conflict has heightened downside risks, with impacts expected through several channels, including energy prices, financial market volatility, and broader economic activity, said Chayawadee Chai-anant, assistant governor for corporate relations at the central bank.

Although the impact has yet to be reflected in economic data, given the typical lag in economic transmission, the conflict has already driven a surge in oil prices, raising production and transport costs across many sectors.

Under a baseline scenario, the regulator assumes the conflict will subside in the first half of the year. However, its economic repercussions are likely to extend into the second half, particularly due to damage to energy infrastructure, which would prolong the recovery process, she said.