If you are from the UK or indeed many other parts of Europe, Brexit is probably not too far away from your mind. With Britain anticipated to leave the EU on 29 March 2019, the deadline is looming close with all parties still seemingly some way off an agreement. If you are an expat living in Thailand the effect that it will have on you personally will depend very much on your own personal circumstances but the longer-term impact may be more significant.
The UK and Thailand’s Trading Relationship
It is hard to imagine that this relationship will be significantly affected with the UK free to negotiate their own trade deals with countries outside the EU. The two countries have always had a strong trading relationship. The biggest issues will be with regard to the value of Sterling against the Thai Baht. Sterling (or the GBP) has fallen by around 25% since the referendum on 23 June 2016. This makes exports from Thailand far more expensive so the combination of the strong Thai Baht and weak Sterling is currently damaging. Opinion is split on whether GBP will strengthen after Brexit.
The Effect on Tourism
Again, the biggest issue with regards to tourists coming from the UK will be the value of the GBP although this will be the same against other currencies. Travelling with Europe will not be as easy as has been the case in recent years so this may sway people’s decision to look at travelling further afield. The effect on tourists from other member states of the EU will be negligible if anything at all. Overall, the impact will come down to affordability for UK nationals and no one else. This will mean that the lower ends of the market will be impacted rather than anyone else.
Only a few minutes walk to The Sportsman, a nice 1 bedroom in Avenue Residence
The Effect on Expats
British Expats are the group that will be affected the most with some set to gain whilst others will take significant losses. Those living and working in Thailand and paid a salary in Thai Baht will be set to make gains if they are considering transferring money back, visiting the UK or buying goods from the UK. Those who are paid in Sterling will be hit hard although in reality any further drops will be nowhere near as significant as those already felt. Anyone who relies on business coming from the UK is also likely to feel the effect. Retirees are likely to be hit hardest hit which brings us to the next point.
Retirement Visa Rules
British retirees living on a UK pension have been severely hit in recent years seeing their income drop by 25% in three years due to exchange fluctuations alone. This is compounded by the fact that rules regarding keeping 800,000 Thai Baht in a Thai bank account have been extended. This now puts Thailand beyond their financial means and they are reluctantly being forced to leave or find alternative sources of funding.
Not far from another popular English venue, nice 3 bedroom bungalow with pool for rent
Although Britain is due to leave the EU on 29 March this is far from guaranteed. There are still the options of delaying an exit, a second referendum or not leaving at all. Arguably, it is this uncertainty that is more damaging than either remaining or leaving the European Union. Overall, Thailand will feel little impact as it is will be certain groups of British nationals who will be set to benefit or lose.
*PLEASE NOTE: The information is only an opinion and is correct at the time of writing.