Stock market drop ‘due to trade war threat’
Sharply falling stocks are a result of short-term volatility as the market reacts to the threat of a trade war, according to the Finance Ministry.
Impact on the Thai and other stock markets was caused by fear of potential trade war between the world’s two largest economies, the US and China, said Soraphol Tulayasathien, director of Economic Stability Analysis Division at the Finance Ministry’s Fiscal Policy Office.
The two countries have threatened to apply higher tariff rates to an expanding list of products.
Soraphol said the Thai economy is resilient to impact of the volatile financial market. This is because the country has high international reserves worth US$212 billion (Bt6.9 trillion), equivalent to 3.6 times short-term foreign debts or 9.8 times monthly import values, he said on Wednesday.
Thailand has also diversified export markets, not only China and US.
Soraphol said export and tourism prospects looked promising.
He did not expect trade retaliation would escalate into the full-blown trade war and noted that some markets in Asia had recovered in today’s morning trade from yesterday’s sharp fall.
He expected the two sides would make a compromise.