The Russia-Ukraine conflict, which has been at war since February 24, 2022, has a wide global impact. The huge impact that affects many countries is rising crude oil prices in the world’s market. If the crisis is prolonged, crude oil prices will remain at a high level for the rest of this year. The industries that are highly affected include the construction business, sea and air freight, oil refineries, and real estate businesses. The Russia-Ukraine war is affecting international trade, especially for carriers that have to change some routes. Moreover, the international freight rate has increased. Besides, it affects money markets and capital markets around the world since people are worried that the conflict will escalate. Meanwhile, it also affects the tourism sector since there are at least 30,000 Russian and Ukrainian tourists stranded in Thailand. Therefore, the Thai government has to take measures to help them appropriately. Furthermore, the crisis also affects payments after Russia was hit with financial sanctions. Prices of various products increase following the rising transportation costs, which are affected by the climbing crude oil prices. In addition, raw material prices increase, such as steel for can production. The war crisis also impacts the agricultural sector, causing high fertilizer prices. In the past, Thailand imported fertilizers from Russia as it was cheaper than elsewhere.

The Thai Chamber of Commerce stated that the impacts of the Thai-Russia and Thai-Ukraine in terms of imports and exports are less directly affected Thailand. However, Thailand will get the indirect impacts, and it will also affect globally. Many goods prices increased, as well as crude oil prices. Another concern is the shipping costs, especially the freight costs. Therefore, in order not to affect exports, which are the main machinery in Thai economic recovery, the government should find a solution to keep the baht depreciation. In addition, the Thai Chamber of Commerce is concerned that the Thai economy might experience stagflation (a high inflation rate) while economic growth is low. As a result, expenses are more than income. This situation must be closely monitored.

The Russia-Ukraine crisis is causing concern among people around the world. Moreover, its impact on the global economy cannot be estimated. Therefore, adaptation and business planning in times of crisis are essential and crucial. The Thai Rubber Association (TRA) expects the war to be resolved and end soon, so it will not affect the Thai economy.

Mr.Chaiyos Sincharoenkul

President

The Thai Rubber Association