6 Jan 2020 International Economy Monetary policy facing constraints… amid a recent jump in oil prices due to mounting US-Iran conflicts (Business Brief No.3842) คะแนนเฉลี่ย คะแนนเฉลี่ย 5 stars 4 stars 3 stars 2 stars 1 star The US-Iran tensions have ramped up after General Qasem Soleimani, the Iran's top commander, was killed in Baghdad on January 3, 2020, shooting up the international benchmark Brent crude on January 6, 2020 by 7 percent as compared to the level registered at the end of 2019. This conflict is being closely monitored and unlikely to end soon. The extent of the impact on Thailand will depend on the level of oil price, and how long it will stay at such a high level. Based on our preliminary projections, if the Dubai crude oil price stays at USD80 per barrel for six months, it will affect Thailand's inflation by 0.75 percentage points from the base case, pushing the headline inflation to 1.15-1.65 percent and cutting the country's GDP by 0.08 percent. As the surge in oil prices will affect inflation, the pressure on the Thai Baht, which has steadily gained strength, might be somewhat eased due to a drop in the country's trade surplus as a result of higher import costs. Consequently, the monetary policy implementation will face greater constraints amid the slowing economy and the drought in 1H20. Thus, fiscal policy will play a pivotal role in sustaining the performance of the Thai economy, which is facing several challenges.To sum up, the situation in the Middle East and the future direction of oil prices are hard to predict. Nonetheless, the recent escalation of tensions will carry enough weight to influence the monetary policy directions of all central banks around the globe, including the Bank of Thailand, which will encounter more policy constraints. Annotation This research paper is published for general public. It is made up of various sources. Trustworthy, but the company can not authenticate. reliability The information may be changed at any time without prior notice. Data users need to be careful about the use of information. The Company will not be liable to any user or person for any damages arising from such use. The information in this report does not constitute an offer. Or advice on business decisions Anyhow. International Economy Global tradeImpact on the Thai economyWorld economyUS economy Related Analysis View all 14 Mar 2018 International Economy Thailand must brace for trade disputes between the US, EU and China, etc. (Current Issue No. 2905) The US is pressing ahead with trade measures against trade partners globally. In addition to their new ‘safeguard tariffs’ on imported solar panels and large washing machines imposed early in 2018, and more recently on imported steel and aluminum, the US is now preparing to implement protectionist measures against Chinese products valued at around USD60 billion. This direction will likely add significant pressure to global trade, thus, KResearch views that all eyes should be closely kept on negotiations between the US and EU, both being among the largest economies in the world. Details on those negotiations are expected to be released before the relevant ‘safeguard tariffs’ on steel and aluminum become effective at the end of next week. If the EU and China are exempted from these new tariffs, prevailing anxiety will ease. But to the contrary, without such exemptions, China and the EU may opt to implement their own trade protectionist measures against the US, as well. This situation would likely escalate into further actions and reactions, incurring significant damage to trade that could spill over to other regions of the world.... 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