FETCO: Thai economy has passed its lowest point
Federation expects 3% growth by year-end 2024, stock index to stay above 1,460 points
Kobsak Pootrakool, chairman of the Federation of Thai Capital Market Organizations (FETCO), says the outlook for Thailand's economy in the fourth quarter of 2024 is to improve steadily from late September going forward.
He believes the overall economy remains on track, with GDP projected to grow by around 3%, indicating that Thailand's economy is beginning to recover, similar to the global economy.
It is forecast that Thailand’s tourism sector could see visitor numbers reach 4 million per month by the end of 2024, which is comparable to the pre-Covid-19 period. Meanwhile, profits of listed companies grew more than 10% in the first half of this year, and it is expected that growth will continue in the latter half.
Regarding capital inflows from the Vayupak Fund and the Thai ESG Fund, it is anticipated that these will bring around 260 billion to 300 billion baht into Thailand’s capital market, providing a boost as the political situation stabilises, thereby increasing investor confidence.
With the new government’s clear economic policies, the continuity of these policies is reassuring. The fact that the finance minister remains from the same team, with the same policy direction, allows the Vayupak Fund to proceed immediately. This continuity is crucial in ensuring the implementation of these policies.
The new capital inflows from the aforementioned funds will certainly further drive Thailand’s capital market. Initially, the Investment Analysts Association (IAA) predicted that by the end of Q3 2024, the Thai stock index would be around 1,379 points. However, it has already surpassed 1,420 points. The initial forecast for the index to reach 1,462 points by the end of 2024 may need revision due to the clearer political outlook.
"Over the next three to five years, Thailand must focus on developing new industries such as digital technology or startups to attract investment. To attract capital, Thailand must create compelling products that draw investor interest," Kobsak said.
Although Thailand's economy is expected to achieve 3% GDP growth, a deeper look reveals underlying issues, particularly at the grassroots level. High household debt and rising non-performing loans (NPLs) are concerning, especially in the auto-loan sector.
"In the next three to five years, economic outcomes can improve if solid foundations are laid," Kobsak said. “Personally, I hope the government implements major planned investment projects, such as the Eastern Economic Corridor, port development, airports, railways, double-track trains, and subways. These initiatives should be pushed forward, as they will drive the economy."
