Scholars concerned about violence in the Middle East

Academics predict that the Israel-Hamas war will expand, affecting energy prices, increasing domestic energy reserves, and increasing digital wallet registrations, emphasizing the hardships of the people and the high economic inequality. It is expected that "El Nino" will turn into "La Nina", causing 56 billion baht in damages. Assoc. Prof. Dr. Anusorn Thamjai, Dean of the Faculty of Economics, University of the Thai Chamber of Commerce, assessed that the violence in the Middle East has turned into a war between Iran and Israel, affecting oil exports and the global economy at large. In the past, the Oil Fund borrowed more than 100 billion baht to manage oil prices, which may result in an additional burden to manage domestic oil prices in order to fix the retail price of diesel not to exceed 33 baht per liter until the end of October 2024. Assoc. Prof. Dr. Anusorn said that Thailand imports energy and oil from the Middle East, accounting for more than 50-52% of Thailand's total imports of such products. The mechanisms and tools for stabilizing oil prices in the short term are more limited. Further reductions in oil excise taxes will increase the risk of the fiscal position. The Oil Fund has already exceeded 100 billion baht in deficit. The use of the Oil Fund to subsidize oil prices has become more limited. Therefore, it is very important to urgently increase the proportion of renewable energy and sustainable bioenergy. We must continue to invest more. Assoc. Prof. Dr. Anusorn added that the number of people interested in registering for the digital wallet exceeded 21 million within the first 2 days, saying that the people responded to the policy and reiterated that most people were experiencing economic hardship. The economic structure was highly unequal. Most people in the country had too little share of income and too little share of assets and wealth. The condition of 'rich concentration, poor distribution' resulted in household debt to GDP being among the highest in the world. The flooding problem in many areas worsened the economic hardship of the people. It is necessary to invest in water management systems to be able to manage floods and droughts better. Thailand faced severe drought in March-April this year and also experienced severe flooding in many areas of the country in the third quarter. It is a transition from 'El Nino' to 'La Nina'. Initial assessment shows that the value of agricultural products, assets and the economy were damaged at approximately 56 billion baht, or 0.3% of GDP. This resulted in an inflation rate increase of no more than 0.2-0.3% due to a sudden decrease in supply (Supply Shock), causing agricultural and food prices to increase. Rice and sugarcane are the most damaged economic crops. Thailand will face drought alternating with flooding every year. The damage will increase in order if there is no immediate investment in water management, water storage and the impact of flooding on the agricultural sector and economic activities is higher than the impact of drought Source: Thai News Agency