Thai trade office in Tel Aviv lists pros and cons of Israel-Hamas war
A prolonged Israel-Hamas war could boost the demand for Thai food products, though shipping costs of exports could also rise exponentially.
This was revealed in a recent report by the Thai International Trade Promotion Office in Tel Aviv, which provided an analysis of the impact of the renewed armed conflict in the Middle East.
The report said that in a positive light, the war provided Thailand an opportunity to export more food and medical products to meet high demand during and after the war. It gave as examples rice, seafood, canned and processed food products, natural rubber and rubber products, medicine, and medical equipment.
The office also expects an increase in the demand for cars and auto parts after the war, though demand for luxury products like jewellery and ornaments would remain low for a long period.
As for the negative impact of a prolonged war, the office warned of rising shipping charges and a delay in the transport of products Thailand imports from Israel, like diamonds, fertilisers, and chemical products.
Moreover, despite potentially higher demand for Thai food products, Israeli consumers will defer purchases of products unnecessary for their everyday consumption, such as cars and parts, jewellery and ornaments, the report said.
Also, many Israeli tourists and businesspeople are expected to cancel their trips to Thailand if the war continues until next year.
The report cited Israel’s Finance Ministry's estimate that the ongoing war with Hamas militants could cost the country “billions of shekels” (1 Israeli shekel equals 9 baht) and bring about an economic recession.
With increased military spending and reduced tourism revenue during the war, Israel is expected to see higher inflation, rising fuel costs, and increasing consumer prices over the next three to six months, the report said citing Israeli economists.
It is estimated that the war will cost Israel at least 1.5% of its gross domestic product (GDP), or 27 billion shekels (243.8 billion baht). This will result in economic growth dropping from the 3% forecast earlier to 2.2%.
The Thai trade office in Tel Aviv also said that the ongoing Israel-Hamas war would affect Thailand’s trade with Israel in three stages.
In the short term, if the war ends no later than November, Thailand would see a sharp decline in trade with Israel, as the Jewish state’s economy would be in recession.
In the medium term, if the war ends sometime between December and February, the three-month period after the war would see increased trade with Israel as the country will be undergoing post-war recovery.
In the long term, Thailand can expect to see increased trade volume with Israel, as the Jewish state recovers from war.
“Israel has a strong economy based on modern technology. So, if the war ends soon, Israel is expected to see a quick economic recovery,” the report said.
Thailand has seen increased exports to Israel over recent years, with a 41% growth in 2021 compared to a year earlier, 14% last year, and 12.6% in the first eight months of this year.
