21 Dec 2022
International Economy
Members of the European Parliament (MEPs) have reached an agreement to set up the Carbon Border Adjustment Mechanism (CBAM), effective October 1, 2023... Read more
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16 Jan 2020
The US-China phase 1 trade pact was officially inked on January 15, 2020, lifting hopes that their 2-year tensions could ease. However, the US and China will continue to experience higher tariffs, in particular China, as some of its exports to US are still subject to additional tariffs at the rate of 7.5 percent despite the US decision to reduce tariffs on Chinese imports worth USD120 billion while other Chinese imports worth USD250 billion are still subject to tariffs at the rate of 25 percent in 2020. ... Read more
6 Jan 2020
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. ... Read more
16 Sep 2019
Drone attacks on Saudi Arabia’s two major oil refineries on Saturday, September 14, 2019 have driven up Brent crude oil price in the futures market by almost 12 percent. The incident has sparked fears among investors worldwide over oil supply disruption because Saudi Arabia is the world’s largest oil producing country and the damage to its refineries have trimmed its oil production capacity by 5.7 million barrels/day or 58.2 percent of its total crude oil production capacity and 5.7 percent of the world’s total crude oil production capacity. KResearch’s assessment on such an impact on the Thai economy is based on two scenarios, as follows:... Read more
1 Aug 2019
As expected, the Federal Reserve (Fed) slashed its policy rate for the first time in over 10 years to a range of 2.00-2.25 percent at its meeting, July 30-31, 2019. However, no signs of another policy rate cut have been seen from the Fed Chair. The outcome of the latest FOMC meeting has disappointed investors and financial markets globally as they were expecting the Fed to be more dovish. Meanwhile, the Baht weakened to approximately THB30.85/USD, August 1, 2019.... Read more
17 Jul 2019
China's economic growth in 2Q19 grew at 6.2 percent, the slowest growth rate in 27 years and down from 6.4 percent in 1Q19. Consequently, China’s gross domestic product in 1H19 rose only 6.3 percent. The slump is a result of a fall in the global and domestic demands. Moreover, the prolonged trade war between the US and China has increased the downward pressure on the Chinese economy. China's exports shrank 1 percent YoY in 2Q19 versus a growth of 1.3 percent YOY in 1Q19. The drop in Chinese exports has taken a toll on China’s industrial sector. China’s Caixin/Markit manufacturing Purchasing Managers’ Index for June declined to 49.4. The reading below 50 signals contraction in China’s manufacturing activity. Moreover, China experienced weaker domestic demand as imports continued to drop to minus growth of 4.1 percent in 2Q19, even though the Chinese government is trying to use various measures to stimulate the economy such as cuts in value added and import taxes and an increase in the government spending budget in infrastructure projects to over 2 trillion Yuan (USD297 billion). However, China’s economy is still losing steam. This shows that these measures may not be enough to boost the economy, and they may only help cushion the slump.... Read more
28 Jun 2019
All eyes are on the G20 Summit, in particular a talk between the US and China, the world’s superpowers, to end the trade war that will last for a year in July 2019. Looking back, it is believed that the US and China knew that they would not benefit from the persistent trade war. A clear consequence of their trade dispute is now seen in rising prices of their imported products and this has hurt their consumers and manufacturers. The stances of the US and Chinese leaders in ending the trade war are based on political benefits and their popularity at home.... Read more
19 Nov 2018
Uncertainties associated with the trade war between Washington and Beijing may prompt investors to manage their business risks by diversifying their investments from China to countries not directly affected by the trade battle. Nonetheless, direct benefits for Thailand will be limited because Thailand is not a major recipient of investments in labor intensive industries. And as products require increasingly sophisticated technologies, many Chinese products have still maintained a price competitive edge, dimming possibilities of diversion of investments. ... Read more