More negative impacts from trade war seen in late 2018

BANGKOK, July 5 (TNA) - The Bank of Thailand (BOT) warns it is likely that negative impacts from the ongoing trade war between the United States and major trading partners, particularly China, should be seen more clearly as of late 2018. BOT Assistant Governor for Monetary Policy Group Jaturong Jantarangs, in his capacity as the secretary of the central bank's Monetary Policy Committee (MPC), voiced the cautionary remarks on July 4 when the central bank released its financial policy report for June 2018. "The ongoing trade war slightly affects the Thai economy now, but more negative impacts on the global economy, including Thailand, in terms of a slowdown in world trade, should be seen as of late this year, which could drag down Thai exports next year", Jaturong cautioned. The BOT assistant governor said the reciprocal trade protectionist measures implemented by the United States and China, as well as other trading partners could, thus, become the most significant risk factor against Thailand's growing economy and exports next year, with the country's shipments of goods to overseas markets anticipated to expand by only 5 per cent year-on-year in 2019, on top of 9 per cent year-on-year in 2018. The BOT assistant governor explained that Thailand is part of China's supply chains and negative impacts from the ongoing trade war on the immense Chinese economy could also affect the Thai economy, probably in terms of China's becoming a rival exporter of Thailand on the world market in similar products, or dumping its cheaper goods on the Thai economy. The BOT assistant governor pointed out that the ongoing trade war has also caused capital outflows from the Thai capital market of about a total of 5.62 billion US dollars so far this year and the depreciation of the Thai baht to a certain extent. However, the BOT assistant governor noted that there should be a need for the MPC to resolve on raising the key Thai interest rate in the future to enhance the national competitiveness on the financial policy, as the Thai economy has kept expanding and the inflation has maintained within a targeted framework. (TNA)