The world’s economy is recovering in many developed countries that can control the COVID-19 pandemic. However, the resolution of the tension between the high inflation rate and the increasing unemployment rate remains the most urgent issue that the US Federal Reserve System (FED) is confronting. According to the result of the Federal Open Market Committee (FOMC) meeting on September 22, 2021, the FED committee forecasted the inflation rate in 2021-2022 to 4.2% and 2.2%, respectively, and the unemployment rate in 2021 to 4.8%. Even though Mr. Jerome Powell, the FED Chairman, did not mention the start of QE Tapering, there is a signal that the QE Tapering will end in the middle of the year 2023. Meanwhile, the inflation rate is projected to slow down when the world’s economy returns to normal after the economic opening.

Thailand’s economic recovery in the fourth quarter is expected to improve due to the improved vaccine development and the relaxation of the COVID-19 restrictions, resulting in positive effects on confidence and consumption of the private sector. In 2022, the economy will gradually recover from domestic and foreign demand, starting with the export that tends to expand at the slowdown rate following the world’s economy. However, the risk factors should be monitored closely, such as the COVID-19 restrictions and situation, policy of country opening for tourists, the continuity of government support measures, supply disruption issue, etc. The Bank of Thailand (BOT) has estimated Thailand’s economy in 2021 and 2022 tends to grow by 0.7% and 3.9%, respectively. Furthermore, the Monetary Policy Committee decided to remain the interest rate at 0.5% for the year 2021 to support the economic recovery. The Bank of Thailand (BOT) will focus on increasing the effectiveness of financial measures to distribute liquidity to household and SMEs business sectors as well as support debt restructuring of financial institutions to be more related to the problems of each group of debtors.

August’s Thailand Industrial Sentiment Index (TISI) dropped from 78.9 to 76.8 because the COVID-19 pandemic is more severe, and the government has stepped up lockdown measures. As a result, the economic activities are slow down. Moreover, it also caused liquidity problems for entrepreneurs, especially SMEs, and people income reduction. Furthermore, entrepreneurs also confront with various factors, including the semiconductor shortage issue, high freight rate, oil prices, and domestic politics. In terms of Thailand’s international trade in August 2021, Thailand’s export income value is 715,416.40 million baht, up 12.83% YoY and up 0.95 % compared with the previous month. Meanwhile, Thailand’s import value is 765,248.80 million baht, up 53.20% YoY and up 7.39% compared with the previous month. In terms of trade balance in August 2021, Thailand recorded a trade balance deficit of 49,832.40 million baht (Ministry of Commerce, 2021).

The Institute for Supply Management (ISM) informed that the US Manufacturing Purchasing Manager Index (PMI) in September 2021 dropped to 60.7 from 61.1 in the previous month due to the labor and raw material shortage issues. Meanwhile, Thailand’s PMI up to 48.9 in September 2021 from 48.3 in the previous month. In August 2021, the demand remains low, and the manufacturing sector is slow down due to the COVID-19 outbreak. Furthermore, there are also concerns about supply constraints and price pressures. As a result, domestic producers are more concerned and cautious in purchasing and employment. At the same time, production costs and product prices are rapidly increasing.

The US Energy Information Administration (EIA) has announced that the crude oil inventories have decreased 4.6 million barrels to 418.5 million barrels for the week ending on 24 September 2021, in contrast with the prediction of a 1.7 million barrels reduction. Overall, crude oil prices slightly increase comparing with the previous month. However, it has slightly reduced after China would like to add their crude oil purchasing to support domestic demand because China is currently confronting a serious energy crisis after their government rolled out the measures for the industrial sector to use renewable electricity. As a result, it affects the whole business sector, especially the manufacturing sector, which is stagnant in September. On 30 September 2021, West Texas Intermediate (WTI) crude oil and Brent crude oil prices stood at 75.03 and 78.52 USD/barrel.

In September 2021, rubber prices decline, pressured by investors worried that the payment default of China Evergrande Group, China's second-largest real estate company, is expected to affect the world’s economy. In September, there has 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. Moreover, the containers shortage issue and the freight rate increasing of shipping lines remain high as the international shipping is insufficient to meet the export demand. Meanwhile, the foreign futures market has an average price lower than the Moving Average (MA) at 200, which can be indicated that the long-term price decline; however, there is a chance of recovery in the medium term. The Baht currency tends to depreciate against the USD. Domestic buyers demand rubber for delivery before the National Day holiday (October 1-7, 2021). Meanwhile, the Rubber Authority of Thailand (RAOT) has prepared a proposal to the Cabinet to approve the rubber farmer income insurance phase 3 scheme after the meeting of Thailand’s Natural Rubber Policy Committee has approved the principle of the scheme (October 2021 to March 2022). USS 3 price is 60 baht/kg. Latex (DRC 100%) price is 57 baht/kg. And Cup Lump (DRC 50%) price is 23 baht/kg.

In August 2021, Thailand exported 394,264.92 tons of natural rubber (including compound rubber), up 11.14% from the previous month and up 11.14% YoY, generating an export income of 21.2 billion baht, up 10.16% compared with the past month, up 67.46 % YoY. In the tyre sector, in August 2021, Thailand exported 12.03 million units of all tyres, down 10.94% YoY, with an export value of 17.4 billion baht, up 6.61% YoY.

In August 2021, Thailand’s car production is 104,144 units, the lowest in the last 13 months, down 11.18% YoY, and down 15.44% compared with the previous month due to the semiconductors and automotive parts shortage issues caused by the COVID-19 pandemic around the world. As a result, ship and automotive parts manufacturers have to temporally close their factories. Thailand’s car production includes production for export by 62,223 units (59.75% of all production) and domestic sales by 41,921 units (40.25% of all production). Meanwhile, Thailand's domestic car sale in August 2021 is 42,176 down 15.08% compared with the previous month due to the lockdown since the middle of July, the car reservation cancellation, and postponed pick-up. From January to August 2021, Thailand’s car production is 1,071,908 units, up 31.89% YoY.