It is quite possible that the economic downturn will not be cured – sensible politicians around the world are working on the belief that Keynesian fiscal stimulation will bring us out of the problems that have been emerging. Yet we are still dealing with confidence and with people and people are, of course, occasionally irrational or just simply wrong. Perhaps all the billions of pounds or dollars that are being invested will not have the desired effect: nobody really knows.
What is clear is that Thailand is more deeply vulnerable to external shocks than most other countries. The reliance upon exports and tourism, coupled with having to devote 12% of GDP on importing oil and gas, mean that the Thai economy depends to an enormous extent upon what happens overseas. Today, more evidence of the problems mounting in the economy is emerging, in the form of a 23% decrease in air freight going through the country. Most of that decrease (which is for the fourth quarter) has resulted from a decline in January. Decreases in freight in either direction (inbound or outbound) are problematic because people want to organize two way flows of goods – if you have something coming in, then you have a good chance to send Thai goods out in return.
It is not possible to know which of various factors are more influential in this decline: some of it may be apportioned to a general decline in trade, some to the relocation of investment projects away from Thailand because of the PAD Disaster and some because of lack of demand specifically for Thai made products. Some freight has also been redirected to sea – cheaper and suitable for non-perishable goods but not for Thai agricultural products.