Much Ado About Nothing? Estimating the Impact of a U.S. Slowdown on Thai Growth

20 Pages Posted: 1 Jul 2008

See all articles by Shekhar S. Aiyar

Shekhar S. Aiyar

International Monetary Fund (IMF)

Ivan Tchakarov

International Monetary Fund (IMF) - Asia and Pacific Department

Date Written: June 2008

Abstract

External demand was the main driver of growth in Thailand in 2006 and 2007. However, WEO projections indicate moderating foreign demand in 2008, with U.S. growth being revised downwards to reflect the turmoil in housing and credit markets, and high oil prices. While the share of Thai exports to the US has fallen in recent years, the US remains Thailand's largest export destination. We use a small structural model and Bayesian estimation to assess the possible impact of a U.S. slowdown on Thai growth. We find that a 1 percent slowdown in U.S. growth in 2008 - relative to the baseline forecast - could have an upper-bound impact on Thai GDP growth of 0.9 percentage points.

Keywords: Working Paper, Thailand, Economic growth, Exports, Economic forecasting

Suggested Citation

Aiyar, Shekhar S. and Tchakarov, Ivan, Much Ado About Nothing? Estimating the Impact of a U.S. Slowdown on Thai Growth (June 2008). IMF Working Paper No. 08/140, Available at SSRN: https://ssrn.com/abstract=1154298

Shekhar S. Aiyar (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW - HQ 5-403
Washington, DC 20431
United States
202-623-8638 (Phone)

Ivan Tchakarov

International Monetary Fund (IMF) - Asia and Pacific Department ( email )

700 19th Street NW
Washington, DC 20431
United States

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