Resilient fundamentals should shield Thailand’s economy from global shocks, particularly US President Donald Trump’s policies and political uncertainties in Europe, according to Standard Chartered Bank (Thai).
It said Thailand’s strong fundamentals included accelerated government investment, low government debt, the easing household debt burden, improved exports and strong tourism.
The bank said the country’s gross domestic profit was anticipated to rise to 3.5 per cent in 2017 and then increase to 4.3 per cent in 2018 and to 5 per cent in 2019.
Standard Chartered Bank held the Global Research Briefing 2017 seminar to provide its current perspectives on economic trends and forecasts for the global economy and foreign exchange markets in 2017.
Usara Wilaipich, a senior economist at the lender, noted that the Thai government would play an increasing role in driving economic growth and in enabling the Kingdom to tackle world economic uncertainties.
The government also plans to accelerate the execution of transportation projects.
Thailand’s Fiscal Policy Office estimates that state-owned enterprise investments will increase to Bt257 billion in 2017 from Bt66.50 billion in 2016.
Domestic consumption is anticipated to rise to 3 per cent.
Additionally, the Cabinet just approved a supplementary budget worth Bt190 billion for 2017. It is hoped this will result in private investment picking up, albeit gradually.
Government investment is anticipated to increase 12.9 per cent this year compared to 2016.
It expects government investments in 2019 to reach Bt550 billion.
Exports are likely to improve, but still underperform.
The economy benefited from positive factors, including Thailand importing mainly raw materials and intermediate goods, to add value and transform the production of export-oriented industries.
Divya Devesh, far Asia foreign exchange strategist at the bank, said that the US dollar was expected to further appreciate this year, due in part to US monetary easing and fiscal stimulus policies.
The baht appreciation is expected to continue over the longer term with some easing of volatility, especially in comparison to other neighbouring countries’ currencies.
In the baht is tipped to depreciate to 36 baht per one US dollar by the end of 2017. An eventual appreciation of the baht is expected in 2018 with it rising to 34 baht by the year’s end.