Kasikorn Research Center on Friday trimmed down Thailand’s GDP growth outlook for the year 2022 from 3.7 percent to 2.9 percent as a consequence of the ongoing Russia-Ukraine war.
According to latest foreign reports, US President Joe Biden and European Commission President Ursula von der Leyen announced on Friday the launch of a joint task force to wean Europe off Russian oil and gas.
The panel will look for alternate sources of liquefied natural gas and will work to lower total demand for natural gas.
The US will work with other countries to supply Europe with at least 15 billion cubic meters of liquified natural gas by 2022, the White House said.
Kasikorn said that if the two eastern European countries achieve an agreement in negotiations by the third quarter of this year and Dubai crude oil price stands at USD90.00 a barrel, Thailand’s economic growth will be 2.9 percent, down from 3.7 percent previously expected, while headline inflation is projected to rise to 3.8 percent, up from a previous forecast of 2.1 percent.
In the worst-case scenario, if Western sanctions on Russia’s energy remain in place until the end of the year, Thailand’s GDP growth might fall to 2.5 percent in 2022, with headline inflation reaching 4.5 percent.
For monetary policy, the center expects the Thai central bank will maintain a historical low of 0.50 percent for the benchmark interest rate. However, with the US Federal Reserve signaling interest rate hikes more than six times this year and rising Thai inflation affecting foreign capital flows, the Bank of Thailand will face more pressure to reconsider raising policy rates.