DESPITE the looming US-China trade dispute, Thailand's Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) has kept its forecast for this year's economic growth at 4.3-4.8 per cent with an estimated Thai export growth of 7-10 per cent.
However, risks remain with fragile economies of emerging-market countries spanning from Turkey to Venezuela which could rip through the Thai currency with higher volatility, said Predee Daochai, JSCCIB chairman in its September meeting.
In the second quarter of this year, the Thai economy grew higher than expected, bolstered by rises in export, tourism, private consumption and agricultural production, he said. Combined with first-quarter expansion, Thai growth was about 4.8 per cent in the first half of this year.
Thanavath Phonvichai, director of University of Thai Chamber of Commerce's Centre for Business and Economic Forecasting, said that August's Thai consumer confidence hit a record high in 64 months since May 2013, indicating that consumers will likely regain confidence after a temporary setback in the past three months, thanks to rises in exports, tourism and farm income on the back of higher prices of several crops.
Thai Consumer Confidence Index (CCI) edged higher to 83.2 last month (August) from 82.2 in July.
The index reflects views on the overall economy, job prospect and income expectations.
“The Thai economy has started to take a more distributed recovery in the latter half of this year. Consumer confidence on income expectations has turned to the 100-level for a second straight month and hit a record high in 64 months, while confidence about political situation has reached 100 for the first time, which has encouraged consumers tospemd more ," Thanavath said. The centre is scheduled to revise the Thai economic figures on September 13.
Thanavath expressed confidence that Thai consumer confidence will stay on the uptrend, while expecting the Thai economy to grow at a normal level in the second quarter of next year (2019).
Escalating trade war between the US and China is expected to have no serious impact on Thailand this year but needs a close watch next yera, he said. The currency crisis and political problems in Latin American countries should be followed up closely.
So far, the US has imposed tariffs on US$50 billion of Chinese goods and China has retaliated in kind. This week, the US will implement a proposed $200 billion in additional tariffs on Chinese goods and China has said that it is prepared to retaliate with its own tariffs on $60 billion worth of US goods.
Kitichan, Sirisukarcha, head of retail research of CGS-CIMB Securities (Thailand) said that the Thai stock market moved down sideways on concerns over the escalating trade dispute between the US and China as the US is expected to impose a new round of tariffs after its September-5 public hearing.
Markets expect the Stock Exchange of Thailand Index to drop below 1,700 points if the US imposes full tariffs of 25 per cent and to stay at 1,700 points if it imposes a 10 per cent tariffs, he said.
Indonesia's rupiah has lost 10 per cent since the beginning of this year, caught up in an emerging market sell-off, which accelerated last week after a plunge in Argentina's peso followed Turkey's lira fluctuations.
Investors were quick in selling stocks in Thailand and the Philippines, given Indonesia is part of TIP (Thailand, Indonesia, the Philippines).
The SET Index yesterday slid 6.80 points to 1,714.41 points with daily trading turnover of Bt44.45 billion.
Late this month, emerging-market currencies are also expected to weaken on expectations of capital flight to seek higher yields after the Federal Reserve's likely hike of the federal funds rate by 25 basis points in the Federal Open Market Committee's September 25-26 meeting.
“If you hold stocks you should take profit and wait for September 5. The first support is 1,713 points, next is 1,707 points," Kitichan said.