Despite a number of of less-than-satisfactory economic numbers, Thailand’s Prime Minister predicts that in the long run, the Thai economy and exchange traded fund (ETF) will be just fine.
Prime Minister Abhisit Vejjajiva says the economy is on its way to recovery as the government’s stimulus plans take effect, reiterating a projected positive annual growth by the fourth quarter, reports Vithoon Amorn for Forbes. Vejjajiva cited the rise in production, factory capacity utilization, sales tax collection and exports.
However, Thailand faces a number of challenges:
- Thailand’s industrial production fell for the eighth consecutive month in June after a reduction in global demand for automobiles and processed food, two of the country’s biggest exports, writes Ron Corben for VOA News. Exports, which fell 25% in June, make up 60% of the country’s GDP. Imports also dropped by 25%.
- The Central Bank estimates a possible 4% contraction this year. The bank is depreciating the baht by allowing more companies to invest overseas in an attempt to make Thai exports cheaper.
- The Consumer Price Index dropped 4.4% year-over-year in July, reports Piyarat Seithasiriphaiboon for The Wall Street Journal. The ministry has adjusted its inflation target to between a 1% to 0% contraction this year. Core inflation, not including energy and food costs, decreased 1.2% year-over-year.
Economists think key rates will remain unchanged at 1.25% and will remain so until 2010. The Central Bank kept rates unchanged since the current level supports Thailand’s economic recovery.
- iShares MSCI Thailand Invest Mkt Index (THD): up 57.7% year-to-date
For more information on Thailand, visit our Thailand category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.