Thai Oil Giant Chief Warns Of Imminent Currency And Trade Wars

Thai oil giant chief warns of imminent currency and trade wars

BANGKOK, Nov 25 – PTT president Prasert Bunsumpun on Wednesday warned of the imminent currency and trade wars between developed and developing countries, saying it could lead to a new round of the global economic crisis.

Delivering a keynote speech on the “Perspective on the Future of Thailand in 2010 and Upgrading Thai Industries into the International Arena,” he said the world economy had begun recovery, driven by the impressive growth registered by new economies including China, India, and Russia.

He said the economies of the world's developed countries remain fragile since they still had substantial public debts, which represents 70-80 per cent of their gross domestic product (GDP), and unemployment of up to 10 per cent.

Currently, the global economy remains imbalanced as could be witnessed by the vigorous growth of the Chinese economy and the negative growth of the US economy.

He said the economic growth imbalance between developed and developing countries would result in many countries issuing varied measures to stimulate their own economies. It would finally lead to the currency war.

The currency war between the developed and developing countries could escalate and develop into a full-scale trade war, which might lead to a new round of global economic meltdown.

Mr Prasert said the Thai economy had recovered due to a continued increase in local consumption and exports to new economies.

However, Thailand must brace itself for the continued weakening of the US dollar in the year ahead, which would have an negative impact on exports to the US.

The PTT chief believes the Thai economy will grow normally at an average of 4 per cent, but it will not expand 7 per cent as it is doing this year.

Thai entrepreneurs, particularly exporters, must keep a close watch on such key risk factors as the currency fluctuation and the global economic uncertainty.

Mr Prasert said Thailand should cash in on its industrial strength to boost competitiveness of various industries and count on its fundamental advantages to enhance trade and tourism.

State-owned PTT is a listed company formerly known as the Petroleum Authority of Thailand, having extensive submarine gas pipelines and a nationwide network of LPG terminals. Its interests include electric power generation, petrochemical production, oil and gas exploration, and gasoline retailing.

PTT has substantial business interests abroad, in Asia, the Middle East, Australia and Canada. (MCOT online news)

-- TNA 2010-11-25