Thailand braces for "US default" impacts

She called for a meeting with the three economic agencies this morning.

Teerat Ratanasevi, government's spokesman, said that at the meeting they discussed the overall picture of the Thai economy and external factors inlcuding the US shutdown and negotiation on the debt ceiling were included.

The NESDB and Finance Ministry's Fiscal Policy Office are of the view that a default would not take place until early November, though the US lawmakers cannot compromise on the debt ceiling by October 17. The US has about US$30 billion of cash in hand. However, if the deal could not be reached by November 15, the situation would be worrying as the repayment of $30 billion debt will come due. In case of default, this could spark capital flight from the US.

Present at the meeting were Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong and BOT governor Prasarn Trairatvorakul. 

The meeting also discussed the Thai economic outlook and three key issues - the lack of liquidity among small- and medium-enterprise businesses, further government support and incentives for border trade, and a study of demand and supply in local meat and farm products to prevent repeated oversupply and price increase problems.