Centre flags war risk to Thai growth

The tourism authority plans to propose measures to the cabinet

- KUAKUL MORNKUM

A worst-case scenario for the Middle East conflict, which is war dragging on without a clear end, would reduce Thai GDP by 2.31 percentage points, according to the Center for Economic and Business Forecasting at the University of the Thai Chamber of Commerce (UTCC).

The centre identified three scenarios for the potential impact of the war.

The first is a short-term conflict expected to be contained and resolved quickly within a month.

In this scenario, the burden from increased energy costs would rise by 23.3 billion baht, export values would dip by up to 32.5 billion baht, and tourism revenue would decline by nearly 9 billion baht. GDP would be cut by 0.35 percentage points.

The second scenario anticipates a prolonged regional conflict lasting around three months, accompanied by a closure of the Strait of Hormuz.

In this case, the economic implications could be severe, with the energy cost burden increasing by 80 billion baht, export value declining by 97.5 billion baht, and tourism revenues falling by 20.8 billion.