Connect with us

Economics

Is Thailand’s boom sustainable ?

Boris Sullivan

Published

on

New project Asoke

Several Thai economic indexes have now past their levels of the pre 1997 crisis, and the Thai Baht is also at record high level compared to the dollar. Does this mean that we are heading toward another busting bubble cycle ?

Thai equities are a juggernaut. The MSCI Thai Index has been on an inexorable multi-year rise. Four of the top five performing equities funds sold in Hong Kong are invested in Thai stocks, according to the information company Lipper.

New project Asoke

There is a sense of déjà vu about the strong capital inflows, rising financial leverage, and red-hot property markets that Thailand is witnessing.

The strong rally in Thai equity markets over the past year has left many battle-scarred investment veterans scratching their heads.

 

In 1997, it was precisely these trends that precipitated the massive devaluation of the baht, which then triggered the Asian financial crisis and left Thailand virtually bankrupt. So the question investors might ask is, is Thailand’s rally sustainable, or it is just undergoing another bubble that will eventually burst?

I would argue the former. To get to that view, you need to appreciate the strength of investment trends under way in Thailand, and the powerfully positive effect of the recent stabilisation of the country’s political situation. Thailand is at the start of a new investment cycle that is expected to last at least until 2020.

The most important driver is a government infrastructure spending programme to the tune of 1.9 trillion baht HK$498 billion, with the peak of the spending outlays occurring in 2016-17.

via Thailand’s boom is sustainable, unlike the one in 1997 | South China Morning Post.

Comments

Economics

Thai economy to grow 4% in 2021 following 6.5% decline in 2020

The World Bank is now expecting the Thai economy to see 4% growth this year, and a 4.7% growth in 2022, despite current challenges from the new wave of COVID-19 infections.

Olivier Languepin

Published

on

Crowded downtown area in Bangkok

The World Bank now expects that the Thai economy to expand by 4 per cent in 2021, according to the latest World Bank Thailand Economic Monitor report “Restoring Incomes, Recovering Jobs” released on Wednesday (Jan 20).

(more…)
Continue Reading

Banking

BoT sees mild impact of new COVID-19 wave on the economy

The Bank of Thailand (BoT) does not see the new wave of COVID-19 infections as having as much of an impact on the economy as the first wave, as fewer businesses have had to be suspended.

National News Bureau of Thailand

Published

on

BANGKOK (NNT) – Despite a new and wider wave of COVID-19 infections in the country, the Bank of Thailand (BoT) has assessed that the economic impact of the situation will not be as severe as the first wave as the effects of the virus are not as pronounced, and public health preparations, including plans for vaccination, are in place.

(more…)
Continue Reading

Economics

COVID-19 brings first consumer confidence drop in 3 months

Consumer confidence in December 2020 was measured at 50.1 points, down from 52.4 the previous month. Economic confidence was also down to 43.5 from 45.6 points.

National News Bureau of Thailand

Published

on

BANGKOK (NNT) – Concerns linked to the new wave of COVID-19 infections has weighed on both daily life and business, resulting in the first drop in the Consumer Confidence Index in 3 months.

(more…)
Continue Reading

Latest

Most Viewed

Subscribe via Email

Enter your email address to subscribe and receive notifications of new posts by email.

Join 13,632 other subscribers

Trending