BANGKOK, 12 MAY 2019 (NNT) - After the United States recently raised a 10% levy on Chinese exports to the US to 25%, the University of the Thai Chamber of Commerce (UTCC) has reported that the export sector and the tourism industry of Thailand would be affected by the ongoing US - China trade dispute and has urged the incoming government to promptly implement new economic stimulus measures.
The Director of the UTCC’s Economic and Business Forecasting Center, Thanavath Phonvichai, says that the 25% tariff imposed by the US on Chinese goods would have an adverse impact on the global economy already facing a slowdown. The UTCC projected that Thai exports will grow by only 1%, from the previous forecast of 3% growth.
The trade war between two of the biggest world economies will dampen Thailand’s tourism sector, as the number of Chinese arrivals in Thailand would drop, due to economic issues in China. The university earlier predicted that Thailand would welcome at least 40 million foreign tourists this year, but that figure is now expected to drop.
It is now expected that the Thai economy will expand less than 3.5% and the next government should introduce new measures to support exports, foreign exchange, tourism, investment, and the prices of agricultural products.
The Government Savings Bank’s (GSB) grassroots economics and business research center, has reported that the confidence index of 500 local startup businesses for the first quarter of this year stood at 58.80 points, which indicates that investors are still confident in the country’s economic situation. However, overseas orders have started to slow down due to the US - China trade war, while the Thai tourism industry is facing growing competition from other countries in the region. As a result, sales and orders have contracted in Thailand.
According to the GSB, the startups’ confidence index for the next three months stands at 67.52 points, as they anticipate that the new government will be formed successfully, causing the domestic economy to improve. Even if the trade negotiations between China and the US might aren’t fruitful, some Thai products may receive bigger orders from the US to replace Chinese goods. In addition, manufacturers from China and the US may relocate their manufacturing plants to Thailand. The tourism sector has also been boosted by the increased number of public holidays in the second quarter of this year.