Thread: SCB Intel Center Says Thailand Currently in Stagflation

BANGKOK (NNT) - The Siam Commercial Bank’s Economic Intelligence Center (EIC) believes that Thailand is currently in a stagflation phase due to an unstable economic recovery and rising prices.


According to Yunyong Thaicharoen, SCB’s chief wholesale banking officer and EIC economist, the EIC has revised the nation’s economic growth forecast from 3.2 to 2.7 percent due to the Russia-Ukraine conflict, which resulted in a spike in fuel and commodity prices. The country’s annual average headline inflation rate is also expected to jump to a 14-year high of 4.9 percent from a previous estimation of 1.6 percent.


A higher inflation rate means that the country’s domestic spending will recover slower than expected. This in turn affects private consumption, causing companies to readjust product prices. The EIC believes that, due to the slow economic recovery and a number of external risk factors, Thailand’s recovery to pre-pandemic levels will be delayed until the third quarter of next year.


The EIC expects the central bank’s Monetary Policy Committee to maintain its policy rate at 0.5% throughout 2022 as it focuses on measures to support economic growth. Meanwhile, the baht is expected to fall to around 33.5-34 against the US dollar in the short term, before recovering slightly to 32.5-33.5 in late 2022 due to the promising recovery of the tourism industry.

SCB Intel Center Says Thailand Currently in Stagflation

Originally Posted by misskit

Meanwhile, the baht is expected to fall to around 33.5-34 against the US dollar in the short term, before recovering slightly to 32.5-33.5 in late 2022 due to the promising recovery of the tourism industry.

I seriously doubt the tourism industry recovery is very promising and the baht will continue to weaken well into 2023.

Originally Posted by Norton

I seriously doubt the tourism industry recovery is very promising and the baht will continue to weaken well into 2023.

Much depends on Covid, here and elsewhere. If it surges from now then maybe it will look better by year end and Thailand will become a more attractive destination again. If they somehow 'control' it for the next few months and it balloons late in the year then another tourist season could be lost.

My bet is that the Baht will weaken in the near term, dropping below 34 to USD1, then it will strengthen again later in the year as the tourist season approaches. After that, it will depend how the next tourist season plays out. That depends not only on Thailand but also on China and Russia. Anybody's guess for 2023.

If I see 35 to the USD then I'll be transferring money.

Stagflation sucks. That was the UK in the 1970s and I think it could be the UK again within this year. It is a difficult pit to climb out of.