Impacts of sustained low petroleum price on Thailand's economy and quantity of the release of co2 resulting from petroleum consumption from the perspective of forecasting computable general equilibrium model

Abstract

The increase of world supply of shale gas and shale oil had sustained the low level of oil price at about 50% of the previous level for the extended period since 2014. There are opinions as found in the media of different perspectives suggesting both positive and negative sides of the economic effects. This study designed a model of the economic change in 5 years by applied the forecasting computable general equilibrium, for the purpose of studying the impact of oil prices that had remained low since 2014 was estimated to be 50% in comparison with that of 2012. The estimation was conducted by comparing two cases of economic changes, consist of 1) the spontaneous economic change due to the net increase in capital factor, which was resulted from the capital accumulation caused by fixed investment of several branches of production. 2) the spontaneous economic change due to the net increase in capital factor, which was resulted from the capital accumulation caused by fixed investment of several branches of production combined with the 50% decrease in oil prices , the level that had had the visible impacts since 2014. The purpose of this study is to report the findings about Thailand’s economic impacts from the perspective of the forecasting computable general equilibrium model. The economic impacts were further used in assessing the release of CO2 resulting from change in oil consumption. It was found that low oil price gave positive effects on the real GDP of Thailand. The oil consumption has increased in greater percentage than the real GDP. From the perspective of economic analysis, this study concludes with an opinion that the generation of CO2 which follows the growth of private income can be contained by the policy that turns the growth of private consumption into saving which is used for public infrastructural investment. The external effect can create opportunity for the investment of the private sector which expands the potential for future income generation.