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Morocco, Thailand, Vietnam and Pakistan are some of the most-affected larger economies, based on energy import and gross domestic product data from the United Nations.
Much of Asia-Pacific will see higher oil and commodity prices, shortages, slower demand for manufactured goods though there will be some trade winners.
Asia-Pacific to experience headwinds
Even before the war started in Ukraine, governments were struggling with rising energy prices that threatened to derail economies emerging from two years of pandemic. But with Vladimir Putin’s aggression, crude oil, diesel and natural gas are trading at or towards record levels.
Most of the Asia-Pacific will experience headwinds in two ways: higher oil and commodity prices and therefore sustained inflation – given that most of the region imports energy.
The Thai government has promised to do its best to keep the price of diesel at no more than 30 baht/litre for as long as possible, until possibly May, while Matteo Lanzafame, a senior economist at the Asian Development Bank, suggests giving subsidies to the poorest segments of the population, who spend disproportionately more of their income on energy.
Headline inflation to reach 4.9% in 2022
Headline inflation for the full year 2022 was expected to exceed the target range, reaching 4.9 percent, driven primarily by rising energy prices and the pass-through of food prices. Inflation could exceed 5 percent in the second and third quarters, mainly attributed to the low-base effect of crude oil prices and government assistance measures in 2021.
A study by the University of the Thai Chamber of Commerce (UTCC) has reported that the conflict between Russia and Ukraine could cost the Thai economy around 244 billion baht and hinder GDP growth for 2022.
A direct impact on tourism
According to UTCC president Thanavath Phonvichai, the Russia-Ukraine conflict has a direct impact on trade and tourism between Thailand and both countries, while the increase in energy prices will affect the market and the country’s inflation rate.
The UTCC believes that the crisis will cost the economy around 244.70 billion baht and slow the country’s growth to around 2-3 percent if the conflict continues throughout the year.