Bangkok: The National Economic and Social Development Council (NESDC) outlines three scenarios for a global energy crisis, fearing that a prolonged outbreak could drag the Thai economy into a state of "stackfeltion."
According to Thai News Agency, Mr. Danucha Pichayanun, Secretary-General of the NESDC, revealed the results of an assessment of the impact of global conflicts on energy prices and inflation. He stated that if the situation resolves by April, the impact on the Thai economy will remain limited, even if crude oil prices rise to an average of no more than $85 per barrel and inflation increases by around 1%. However, if the situation escalates and drags on for more than three months, affecting key transportation routes such as the Strait of Hormuz, the global economy risks entering a recession. Thailand, in particular, could face "stackfeltion," or economic stagnation amidst high prices, with oil prices potentially soaring to $105 per barrel.
In a worst-case scenario of a large-scale war, although the NESDB assesses the probability to be low, it could push oil prices above $120 per barrel and cause Thailand's inflation to exceed the 3% target. This would directly impact three key sectors: agriculture, manufacturing, and transportation. The NESDB continues to monitor financial market volatility and the potential weakening of the Thai baht due to global pressures, in order to prepare measures to mitigate potential long-term economic risks.