Tightrope walk for Thai government as Ukraine invasion brings new challenges

13 Sept 12:35 Key points summarised by AI

The Ukraine invasion has severely impacted global energy, food, and fertilizer supplies, causing soaring prices that burden Thailand's import-dependent economy, manufacturers, and consumers already recovering from COVID-19.
The Thai government temporarily eliminated excise tax on diesel and bunker oil to alleviate cost burdens, a move that highlights limited fiscal space and prompts calls for broader tax cuts and more targeted subsidies from economists.
Thailand faces a risk of stagflation, with rising costs and constrained consumer spending, while the central bank navigates increasing inflation, potential currency weakening due to interest rate differentials with the US, and a widening current account deficit if tourism recovery falters.

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