The nasty consequences of the Ukrainian war are threatening several sectors of the Thai economy. International tourism as a whole is threatened by the Russian invasion which is dissuading many travellers from traditional markets, notably Europe. The Manchester-based consortium Exotica said, “Thailand is not a pull right now. Air fares are bound to rise and people don’t like to be on the other wide of the world when there’s real trouble in Europe.”
Then there’s the pandemic. American authorities are strongly advocating their nationals avoid Thailand right now because of the high infection rates, even though most Omicron cases here are domestic-borne and minor in symptoms. The Washington-based Center for Disease Control and Prevention added Thailand to its red-list this week, although the majority of the world’s countries – 136 at the last count – are also included.
Although Thailand has not sanctioned Russia and direct trade between the two countries is low (about one percent of Thailand’s imports and exports combined), Russian consumers are cutting back on luxuries such as Thai fresh fruit and frozen seafood. Air transport between Thailand and Russia has almost ceased with regular flights regularly cancelled. With the international oil price hovering around US$140 and diesel about to burst the 30 baht per liter barrier, inflation and supply chain crunches are inevitable.
Peyton Enloe, a Bangkok-based exporter, said, “Flying fresh farm produce to both Russia and Europe depends on speed and reliable connections. Aeroflot has been banned from most European countries already.” He added that the rising cost of fuel was already creating difficulties as prices to wholesalers and retailers rose.
Thailand’s Ministry of Commerce has announced that inflation has now reached 5.28 percent which is a 13 years high and well above forecasts. Chaichan Chareonsuk, chair of the National Shippers Council, told Al Jazeera, “The geopolitical situation, global inflation, freight costs and the pandemic are all very worrying.” 2022 is not looking good for Thailand.