Thailand Eyes Long-Term Investment to Weather US Rate Hike
Thailand's top economist warned that the U.S. Federal Reserve's interest rate increase threatens capital flows, urging the nation to boost long-term investments and prepare for domestic risks like flooding to weather potential economic shoc
On September 18, Danusorn Pitchayanan, Secretary-General of the National Economic and Social Development Council, addressed the fallout from the U.S. Federal Reserve's decision to raise interest rates by 0.25 percent—the first increase in three years. Danusorn stated the rate hike is unwelcome as it heightens global market risk. For Thailand, the Bank of Thailand must adopt appropriate countermeasures, as the U.S. move may push foreign interest rates higher while the interest rate gap between Thailand and overseas markets could pressure capital flows.
Danusorn said that while government agencies need to formulate policies to manage the situation, he personally believes the priority is advancing investment with focus on long-term strategy to ready the nation for any shock or volatility. The country must also prepare for domestic risks including flooding and drought to prevent these compounding external impacts.
On rising energy prices and transport costs, Danusorn acknowledged that Thailand has stabilization funds and mechanisms in place, but cannot guarantee cheap fuel for all since energy prices follow market mechanisms. Daily wage earners may face heavier impacts. He stressed that the public, private, and business sectors must prepare together, with the government pushing energy transition, though implementation details remain to be determined.
