2014/10/16 in Latest news - 41
Bullish StanChart sees 6% Thai growth next year
STANDARD CHARTERED BANK is extremely bullish about Thailand's economy next year, believing that growth will accelerate and definitely return to its true potential - or even better - due to improvements in both internal and external environments that will be supported by expected increases in public, private and foreign direct investment (FDI).
The bank predicts economic growth coming in at around 6 per cent next year, and 6.5 per cent in 2016.
Usara Wilaipich, senior economist at Standard Chartered, said sustained political stability should enable Thailand to realise its growth potential from a strong basic financial structure, the return of consumer confidence and business sentiment, and the expected increase of public spending from a functioning government.
She also cited the tangible execution of government policies which, coupled with declining stocks, would encourage the private sector to invest more next year.
Usara also sees a new wave of FDI, which is already on its way to Thailand as a result of the recovery of the domestic and global economies.
FDI flow is expected to be even better next year, while major economies such as Japan and China are eyeing using Thailand as a manufacturing hub and a launch pad to frontier markets with high growth potential in the CLMV (Cambodia, Laos, Myanmar and Vietnam) region.
"Obstacles which have hampered Thailand's economic growth in the past seven years, such as the US sub-prime crisis, flood disaster and the political crisis, are disappearing and I can see new factors that will stimulate and support Thailand's economy next year," she said
"The Bank of Thailand's economic growth prediction of 4.8 per cent will definitely be realised, but the potential for growth to reach the 6-per-cent mark in 2015 will also depend on political stability next year," she added.
One key factor that will help drive the economy next year is the potential increase in FDI, from a combination of new investment plus around Bt1 trillion of leftover investment approved by the Board of Investment since the beginning of 2012 but which has not actually been invested, she explained.
The Thai Bond Market Association has also revealed that demand from the private sector to issue coverage bonds to raise funds is about to reach a record high this year, she said.
"There are many signals from various directions that domestic investment is about to increase rapidly, while the technical problems which act as barriers to investment are falling down," she added.
Usara Wilaipich, senior economist at Standard Chartered, said sustained political stability should enable Thailand to realise its growth potential from a strong basic financial structure, the return of consumer confidence and business sentiment, and the expected increase of public spending from a functioning government.
She also cited the tangible execution of government policies which, coupled with declining stocks, would encourage the private sector to invest more next year.
Usara also sees a new wave of FDI, which is already on its way to Thailand as a result of the recovery of the domestic and global economies.
FDI flow is expected to be even better next year, while major economies such as Japan and China are eyeing using Thailand as a manufacturing hub and a launch pad to frontier markets with high growth potential in the CLMV (Cambodia, Laos, Myanmar and Vietnam) region.
"Obstacles which have hampered Thailand's economic growth in the past seven years, such as the US sub-prime crisis, flood disaster and the political crisis, are disappearing and I can see new factors that will stimulate and support Thailand's economy next year," she said
"The Bank of Thailand's economic growth prediction of 4.8 per cent will definitely be realised, but the potential for growth to reach the 6-per-cent mark in 2015 will also depend on political stability next year," she added.
One key factor that will help drive the economy next year is the potential increase in FDI, from a combination of new investment plus around Bt1 trillion of leftover investment approved by the Board of Investment since the beginning of 2012 but which has not actually been invested, she explained.
The Thai Bond Market Association has also revealed that demand from the private sector to issue coverage bonds to raise funds is about to reach a record high this year, she said.
"There are many signals from various directions that domestic investment is about to increase rapidly, while the technical problems which act as barriers to investment are falling down," she added.
THE NATION October 16, 2014 1:00 am
Author:
Patrick Lusted
