Macro Economy/investment

Macro Economy/investment
Report: Chatrudee Theparat

NESDC warns the private sector to prepare itself for the possible recession next year

The National Economic and Social Development Council (NESDC) today suggests the private sector to prepare itself to meet the possible recession next year following signs of the global recession.

Secretary General to the National Economic and Social Development Council Danucha Pichayanan

Secretary General to NESDC Danucha Pichayanan said currently there are signs to show the likelihood of a global recession. The agency is taking a closer look at the scale of the impact in order to prepare itself to meet the future situation.

He warned the private sector should prepare itself to meet such a scenario by managing cash, especially cash holding.

“We feel worried about the coming global recession because it could directly affect to the national economy because our economy is on the recovery path from Covid-19 pandemic.”

The global recession is projected to affect the export sector due to declining consumption among importers.

He said it is hard for China to grow its economy of about 5.5%. Another worry is its troubled property market which the agency is monitoring more closely over its development. If its economic trouble takes place, it will send a negative impact on Thai export. Although Thai export is essential for daily consumption among Chinese, its impact could be unavoidable.

“Thai exporters should prepare itself by looking for alternative markets because scale of the impact on each nation from the global recession is varied, depending on their economic capability and crisis preparation.”

For Thai households, they should be cautious for their expenditure and saving management.

Currently, the Bank of Thailand (BoT), Finance Ministry and NESDC are working together to predict the scale of the impact in each region and also Thailand based on scenarios.

However, he said the Thai economy remains fundamentally strong such as a high holding of foreign reserve and capability in boosting economy. The government should to speed up investment in the government, state-owned enterprises and the private sector, as well as boosting tourism sector.

In short term the government should take a concrete action by monitoring energy price after the Organization of the Petroleum Exporting Countries (OPEC) announced to reduce oil production more than 2 million barrels per day, resulting in pushing crude oil price up to $100 a barrel.

Deputy Prime Minister Supattanapong Punmeechaow

Deputy Prime Minister Supattanapong Punmeechaow maintained the Thai economy projection to grow 3% this year because Thailand has not get hit from the global recession. However, the OPEC’s reduction in crude oil production has caused a rising energy price and drive inflation up. And it has given more burden to the government and the private sectors which rely on oil import.