Thailand's current account, which had traditionally remained in surplus, has swung into a deficit of nearly 500 billion baht over the past two months.
Thailand must act quickly to stem its mounting current account deficit before it spirals into a current account crisis, says Finance Minister Ekniti Nitithanprapas.In a post on his official Facebook page, Mr Ekniti said that while the government's emergency borrowing decree would increase public debt, the loans are necessary to accelerate Thailand's transition from fossil fuels to clean and renewable energy.
"If we fail to act now, we risk facing one crisis on top of another," he wrote, citing the fact that, after Thailand was hit by soaring oil prices in April and May, the country's current account, which had traditionally remained in surplus, swung into a deficit of nearly 500 billion baht over the past two months.
A major contributing factor was the sharp rise in the cost of crude oil and natural gas imports. If the situation persists and the geopolitical conflicts driving volatility in global oil prices continue, Thailand could face prolonged current account deficits, potentially leading to a current account crisis similar to those experienced in the past, he added.
