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Prepare for Container Overflow: A Sign of Global Economic Recession

November, 24 2022

The Council of Employers' Organizations has identified four key risk factors that could impact Thailand's economy towards the end of this year and into mid-next year:

1. Global Economic Recession & Trade Partner Slowdown

   • The global economy and major trading partners are experiencing the worst downturn in four decades. Thailand will inevitably feel the effects of this crisis.

2. Severe Inflation Continuing into 2023

   • The world is entering a period of persistent high inflation, which is expected to last through 2023. Thailand is also struggling with inflation, leading to rising prices for consumer goods and household necessities into next year.

3. Declining Business Liquidity & Rising Household Debt

   • Over the past year, household debt has surged by 492 billion baht, a 3.46% increase. By the end of the year, it could exceed 700 billion baht.
   • Rising household debt is directly correlated with the growing number of people living in poverty, as seen in the increase in state welfare recipients under the "poor people's card" program.
   • Over the past year, the number of registered low-income individuals rose from 13.65 million to 20.105 million, a 47.25% increase, highlighting Thailand’s structural economic vulnerability, where nearly one-third of the population is classified as poor.

4. Baht Depreciation & Declining Foreign Reserves

   • The Thai baht continues to weaken, with a 14.33% depreciation over nine months and a projected downward trend.
   • From early 2022 to mid-October, foreign reserves fell by USD 47.937 billion, a 17.4% decline, with a trade deficit of USD 14.137 billion.
   • Managing this record decline in foreign reserves will be crucial in preventing the baht from weakening beyond a stable threshold.