No-deal Brexit could hit Thai trade: experts
Thai experts are worried that Britain's impending withdrawal from the European Union (EU) could hit Thailand's trade and investment in the country.
Krungthai Compass research centre’s senior director Phacharaphot Nuntramas said if Britain exits the EU without a deal on January 1, the pound is expected to weaken by about 10 per cent to 1.20 against the US dollar.
This would cause importers and exporters to delay trade in British products, he said.
"However, we believe that Britain and the EU can reach a deal to maintain trade privileges or else extend the negotiation period for up to three months," he added, citing the far greater urgency of the Covid-19 crisis.
CIMB Thai Bank head of research Amonthep Chawla said the unclear direction of Brexit negotiations had triggered fears of higher product prices and inflation as the pound sterling had weakened sharply.
He also expects to see Brexit negotiations extended for another three months due to the Covid-19 outbreak, adding that the talks would not lead to a global financial crisis.
"However, Thailand should seek to sign a free trade agreement [FTA] with Britain to boost exports," he said.
Siwat Luangsomboon, deputy managing director of Kasikorn Research, said Britain would face difficulties whether or not the outcome was a no-deal Brexit, as more than half of the country's exports are to European countries.
Brexit would have no affect on Thailand since 2 per cent of Thai exports go to Britain, he said, adding that Thailand should still sign an FTA with Britain to boost exports.
"Whether or not we see a no-deal Brexit, the result will not impact financial markets because they have already priced in the outcome," he said.
