Commerce Ministry sees short-term impact from US strike on Iranian general

The ministry believes the impact could be more if the situation is not resolved.
Pimchanok Vonkorpon, director-general of the Trade Policy and Strategy Office (TPSO), revealed that the US operation that killed powerful Iranian commander Maj-General Qassim Suleimani on the morning of January 3 will have effects on the macro-economy and cause fluctuations in the money and capital markets.
The situation will encourage investors to turn to low-risk assets and could lead to a rise in the price of gold.
However, in the medium to long-term, the TPSO estimates that these events will have only a slight effect on confidence and the investment climate.
It is expected that the overall global economy should be better than last year with other positive factors helping alleviate the effects, such as the progress in the US-China trade agreement and the economic stimulus measures of many countries. If there is retaliation and the shipping routes are closed, the oil price will tend to increase further because most of the oil from the Middle East goes through the Strait of Hormuz with Iran being the main player in controlling the route.
Global shipping will be affected as more than 20 per cent of trade passes through the Strait of Hormuz. If the route is closed, tanker ships and cargo will not be able to use the channel to enter the Indian Ocean.
As for the issue of trade, Thai exports related to oil (plastics, chemicals, petroleum products, crude oil, natural gas, gas, and petroleum liquids) were worth $22.87 billion, or about 11 per cent of total exports in 11 months of 2019. However, the unrest will increase the challenge to revitalise the export markets in the Middle East, especially Iraq and Iran and the African market using the Middle East as trading posts for Thai products.
“The Ministry of Commerce is ready to lead the private sector to tap the markets of at least 16 countries, including the Middle East in 2020,” Pimchanok said. She added that although Thailand was currently not directly affected, aside from capital markets, money markets and high volatility in oil prices, the TPSO would closely monitor the situation and prepare a response plan.
"In the first 11 months of 2019, trade between Thailand and the Middle East totalled $25.68 billion ( 5.8 per cent of total trade), with exports valued at $7.64 billion and imports at $18.03 billion. The trade between Thailand and Africa is worth $9.37 billion ( 2.1 per cent of total trade), with exports worth $6.28 billion and imports of $3.08 billion,” Pimchanok added.