The world’s economy is recovering in many developed countries that can control over the COVID-19 pandemic. As a result, the manufacturing sector continually extends even there is a new wave of the COVID-19 outbreak. Meanwhile, the service sector remains to have strict control measures, resulting in slow recovery. However, it depends on the access to vaccines that are effective against new mutant virus of the COVID-19. While many countries in Southeast Asia, including Thailand, remain to confront the COVID-19 outbreak, especially the Delta variant.

Thailand's economy in 2021 is forecast to recover slowly due to the increasing impacts of the COVID-19 outbreak as well as the strict epidemic control measures. As a result, economic activity, household income, and consumer confidence decline. While government measures can partially help support purchasing power. Export softens due to the slowdown in demand of trading partners. Even though the number of foreign tourists increases from the Phuket Sandbox campaign, the income remains low. In addition, the cost of international shipping continues to rise. Other factors need to be monitored, such as supply disruption risk, including the COVID-19 outbreak clusters in factories, the shortages of semiconductors chips and containers. According to the outcome of the 5th Monetary Policy Committee Meeting 2021 held on 4 August 2021, the Committee voted 4 to 2 to maintain the policy rate at 0.50 percent. Two members voted to cut the policy rate by 0.25 percentage. One MPC member was unable to attend the meeting. The next Monetary Policy Committee Meeting will be held on September 29, 2021.

July’s Thailand Industrial Sentiment Index (TISI) dropped from 80.7 to 78.9 because the COVID-19 cases in factories are still severe and spread further. It affects the manufacturing sector, causing labor shortage issues. Moreover, lockdown measures and curfew measures cannot help reducing the infected cases. Furthermore, it directly affects the business sector, especially SMEs and households having less income. Due to all of the factors mentioned, the economic activity is slow down, and the domestic demand is weak. Besides, oil prices and the domestic political issue are still the factors that affect entrepreneurs. In terms of Thailand’s international trade in July 2021, Thailand’s export income value is 708,651.66 million baht, up 22.16 % YoY but down 3.99% compared with the previous month. Meanwhile, Thailand’s import value is 712,613.16 million baht, up 48.22 % YoY, but down 0.84% compared with the previous month. In terms of trade balance in July 2021, Thailand recorded a trade balance deficit of 3,961.50 million baht. (Ministry of Commerce, 2021).

The Institute for Supply Management (ISM) informed that the US Manufacturing Purchasing Manager Index (PMI) in August 2021 dropped to 61.1 from 63.4 in the previous month with the production limitation due to the raw material shortage. Meanwhile, the US dollar weakened against other major currencies in trading on the New York Exchange Market. 

According to The ADP National Employment Report, the employment of the US private sector increased 374,000 positions in August, lower than analysts' estimates of 613,000 positions. Moreover, many investors projected that the Federal Reserve (FED) does not tend to declare credit limit reductions in the bond purchases schemes following quantitative easing (QE) measure in this monthly meeting. Meanwhile, Thailand’s PMI dropped to 48.3 in August 2021 from 48.7 in the previous month. In July 2021, the demand and production declined due to the COVID-19 outbreak. As a result, domestic producers were more cautious in purchasing and hiring. At the same time, production costs and product prices were rapidly increasing.

The US Energy Information Administration (EIA) has announced that the crude oil inventories have decreased 7.2 million barrels to 425.4 million barrels for the week ending on 27 August 2021, the lowest since September 2019. Crude oil prices slightly change but still confront with the pressure of volatile US currency and the production increase of OPEC+. Moreover, the amount of Mexico's crude oil production tends to rise to the normal level. Furthermore, crude oil refineries in the Gulf of Mexico are affected by Storm Ida, resulting in the lack of electricity and the flood caused temporarily stopped production. Due to the COVID-19 outbreak all over the world, many countries have imposed travel restrictions. As a result, oil demand and the economy are pressed. On 30 August 2021, West Texas Intermediate (WTI) crude oil and Brent crude oil prices stood at 68.50 and 72.99 USD/barrel.

In August 2020, rubber yield increases. Overall, rubber prices have increased with supports from the baht's depreciation against the USD, rubber demand for delivery of Domestic buyers, and measures to stabilize rubber prices from government agencies. The foreign futures market has an average price above the Moving Average (MA) at 200, which can be indicated that the long-term price is in an uptrend. However, there is a chance to shrink in the medium term. Meanwhile, Tokyo Futures Market declines about 1%. In September, it is forecast to be the heaviest rainfall of the year, and there will be heavy rain in many areas that may cause flash floods. As a result, some rubber plantations cannot be tapping caused the rubber yield available to the market is less. Furthermore, the containers shortage issue and the freight rate increasing of shipping lines remain high, with an increase of 4-5 times as the international shipping is insufficient to meet the export demand, especially in the Americas zone.

In July 2021, Thailand exported 354,740.51 tons of natural rubber (including compound rubber), up 4.75% from the previous month and up 12.85% YoY, generating an export income of 19.3 billion baht, up 5.19% compared with the past month, up 64.50% YoY. In the tyre sector, in July 2021, Thailand exported 12.25 million units of all tyres, down 2.54% YoY, with an export value of 16.8 billion baht, up 10.76% YoY.

In July 2021, Thailand’s car production is 122,852 units, up 37.52% YoY, and down 8.49% compared with the previous month due to the automotive parts shortage issue, including production for export of 69,934 units (56.93% of all production) and production for domestic sale 52,918 units (43.07% of all production). Meanwhile, Thailand's domestic car sale in July 2021 is 52,442, down 15.08% compared with the previous month due to the car reservation cancellation and postponed pick-up. From January to July2021, Thailand’s car production is 967,453 units, up 39.11% YoY.