The world’s economy is recovering, but it tends to slow down due to the COVID-19 outbreak. Furthermore, it directly affects the economic recovery in many countries. Recently, the International Monetary Fund (IMF) predicts that the world’s economy will grow by 6% in 2021.

Thailand's economy in 2021 is forecast to recover slowly. The Fiscal Policy Office expects that Thailand’s economy will grow 1.3% per year due to the impact of a new wave of the COVID-19 outbreak at the end of the second quarter of 2021, which spread rapidly in various clusters. As a result, it affects economic activities. Other risk factors that need to be monitored include the uncertainty of the COVID-19 outbreak situation, the plan to allow foreign tourists back to the country, the volatility and uncertainty of the world oil market, and the direction of global monetary policy. Therefore, the Thai government should expedite the COVID-19 vaccine procurement and distribution to control the outbreak. Besides, the government should accelerate in distributing liquidity to those affected by the COVID-19 impacts. In addition, the government should support debt reduction and economic restoration. Even though Thai exports continually expand following the global economic recovery, Thailand's export value in the first five months of 2021 grew 14.5% per year. In addition, the Bank of Thailand (BOT) estimated that the latest wave of the COVID-19 outbreak affects GDP by 0.8-2%. In terms of the interest rate, whether it will remain at 0.5% per year, it has to be monitored on the 5th/2021 Monetary Policy Committee Meeting, which will behold on August 4, 2021.

June’s Thailand Industrial Sentiment Index (TISI) dropped from 82.3 to 80.7 due to the third wave of the COVID-19 outbreak. It causes many infected and new clusters, especially in industrial plants, directly affect the manufacturing sector. As a result, the government has to step up the COVID-19 strict control area in Bangkok Metropolis and vicinities and four southern provinces. Moreover, vaccine distribution has been delayed. As a result, economic activity is slow down, and domestic demand is still weak. In terms of the export sector, the semiconductor chips shortage issue intensifies, resulting in the delay in the production of electronic and automotive products. In terms of Thailand’s international trade in June 2021, Thailand’s export income value is 738,135.34 million baht, up 41.48% YoY, and up 3.25% MoM. Meanwhile, Thailand’s import value is 718,651.32 million baht, up 51.33% YoY, and up 2.68% MoM. In terms of trade balance in June 2021, Thailand recorded a trade balance surplus of 19,484.02 million baht, down 58.39% YoY (Ministry of Commerce, 2021).

The Institute for Supply Management (ISM) informed that the US Manufacturing Purchasing Managers’ Index (PMI) in July 2021 is up to 63.4 from 62.1 in the previous month, driven by the increase of new orders, employment, and the confidence of business sector. Meanwhile, Thailand’s PMI drops to 48.7 in July 2021 from 49.5 in the previous month. In June 2021, the demand and the production are slow down due to the COVID-19 outbreak. As a result, purchasing and employment activities dropped. Various companies are more cautious in employment. The decrease of the demand affects the activities in manufacturing factor drop. Meanwhile, the slow demand alleviated the inflationary pressure on production costs. Many entrepreneurs’ confidence is still negative, resulting in the overall confidence in the manufacturing sector continually decline.

The US Energy Information Administration (EIA) has announced that the crude oil inventories have decreased 4.1 million barrels to 435.6 million barrels for the week ending on 23 July 2021. Crude oil prices remained stable after the OPEC+ agreed to increase the production amid the COVID-19 pandemic (Delta variant) spreading around the world. The decrease of the crude oil inventories reflects that the oil demand in the US is still high. Moreover, the crude oil market is supported by the weakening US dollar comparing with other currencies. On 29 July 2021, West Texas Intermediate (WTI) crude oil and Brent crude oil prices stood at 73.62 and 76.05 USD/barrel.

In July 2021, rubber yield declines. The rubber yield is still out less to market due to heavy rain in the South of Thailand. Overall, rubber prices decrease in line with the foreign futures market. The purchasing in the foreign futures market is in a downtrend and high selloff. However, entrepreneurs still have rubber demands for delivery before the end of this year. Due to the COVID-19 outbreak in many countries, including Thailand, are still out of control, various countries have to use lockdown measures and prohibit people from leaving the house during the specified period (Curfew measure). Besides, the rubber buyers are slow down their purchasing. In addition, the Thai baht tends to depreciate against the US dollar. Meanwhile, crude oil prices tend to rise. However, the government continues to monitor and prepare to solve the problems during the volatile prices and continues to proceed with the long-term measures. Therefore, the situations in both domestic and foreign should be monitored closely.

In June 2021, Thailand exported 338,669.32 tons of natural rubber (including compound rubber), down 3.13% from the previous month and up 0% YoY, generating an export income of 18.3 billion baht, down 1.41% compared with the past month, up 37% YoY. In the tyre sector, in June 2021, Thailand exported 13.43 million units of all tyres, up 27.19% YoY, with an export value of 18 billion baht, up 47.78% YoY.

In June 2021, Thailand’s car production is 134,245 units, up 87.22% YoY, and down 4.23% compared with the previous month due to the automotive parts shortage issue, including production for export of 74,574 units (55.55% of all production) and production for domestic sale 59,671 units (44.45% of all production). Meanwhile, Thailand's domestic car sale in June 2021 is 61,758, up 10.40% compared with the previous month. From January to June 2021, Thailand’s car production is 844,601 units, up 39.34% YoY.