The 2022 outlook for Thai companies looks bleak. The dire consequences of the Ukrainian war threaten several sectors of the Thai economy.
International tourism as a whole is under threat from the Russian invasion that keeps many travelers from traditional markets, especially Europe. Manchester-based consortium Exotica said: “Thailand is not a hot spot at the moment. Airfares will undoubtedly rise and people don’t like being on the other side of the world when there are real problems in Europe.”
US authorities strongly advocate that their citizens avoid Thailand at this time due to its high infection rates, although most cases of the Omicron variant are transmitted domestically and symptoms are minor. The Washington-based Center for Disease Control and Prevention added Thailand to its red list this week.
Although Thailand has not imposed sanctions on Russia and direct trade between the two countries is at a low ebb (about one percent of Thailand’s imports and exports combined), Russian consumers are cutting back on luxury items such as Thai fresh fruit and frozen seafood. Air transport between Thailand and Russia has almost stopped with regular flights being regularly canceled.
With international oil prices hovering around $140 and diesel poised to break the 30 baht per liter barrier, inflation and supply chain tightness are inevitable.
Mr Peyton Enloe, a Bangkok-based exporter, said: “Flying fresh agricultural produce to both Russia and Europe depends on speed and reliable connections. Aeroflot is already banned from landing in most European countries.” He added that rising fuel costs were already causing problems as prices for wholesalers and retailers rose.
The Thai Ministry of Commerce has announced that inflation has now reached 5.28 percent, which is a 13-year high and well above forecasts.
Chaichan Chareonsuk, chairman of the National Council for Shippers, told Al Jazeera: “The geopolitical situation, global inflation, freight costs, and the pandemic are all very worrying.”
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