An intriguing communiqué originating from the Thai International Trade Promotion Office located in Tel Aviv provides an in-depth examination of how the recent reinvigoration of the Middle East armed conflict could impact the Thai economy.
Despite the hostile environment in the Middle East, the report highlights unseen benefits for Thailand. It anticipates an increase in exportation of food supplies and health-related products. The exacerbated conflict is likely to surge the requirement for items such as rice, shellfish, professionally packaged food, natural and synthetic made rubber commodities, pharmaceuticals, and medical appliances for disease prevention and wellness.
Furthermore, the assessment projects a rise in the requisition of automobiles and car components succeeding the battle’s termination. It suggests, however, that the appetite for more opulent items such as intricate jewelry and ornamental décor may experience a sluggish recovery.
Conversely, the report doesn’t shy away from the potential negatives associated with a protracted war. Among the dark clouds of escalating shipping costs, and significantly delayed transportation of exports to Thailand, especially those from Israel including diamonds, fertilizers, and various chemicals.
The analysis also underlines that notwithstanding the probable boost in demand for Thai foodstuffs, Israeli consumers will hold off from acquisitions of non-essential products for daily use. This includes such items as cars, parts, jewelry, and decorations.
There is also the expectation that due to the endurance of war, journeys to Thailand may be postponed or canceled entirely by Israeli tourists and trade entities. It refers specifically to the Israeli Ministry of Finance’s speculated projection that the ongoing confrontation with Hamas could considerably strain the nation’s finances, leading to a dip in the economic growth rate.
With military expenditure ballooning and dwindling tourism income, causing a ripple effect of higher inflation, fuel costs, and rising consumer prices, experts theorise that the war might shave off a significant 1.5% from Israel’s Gross Domestic Product (GDP), causing an alteration in their predicted growth rate of 3%: this could lower it to a mere 2.2%.
The Thai trade consulate in Tel Aviv broke down the potential implications of the Israel-Hamas conflict on Thai-Israeli commerce into three phases. A quick journey to the end of the war by November would lead to a short-term drop in trade volume owing to an Israeli economic downtown.
However, should the conflict draw its final breath sometime between December and February, the recuperative three month period would result in an upswing in Israeli trade. Looking at the bigger picture, Thailand stands to benefit from a larger influx of Israeli commerce in the long-term, as the nation emerges from the ashes of conflict.
The report resonates with hope: “Israel’s robust economy, rooted in advanced technology, promises a swift bounce back following the war’s conclusion.”
Over recent years there has been a notable growth spurt in Thai exports to Israel. When compared to the previous year, 2021 experienced a 41% surge in export growth, 14% last year, and impressive 12.6% in the initial eight months of this year.