The outlook for Thailand’s economy is looking much improved in the wake of unrest in the country in May, which hurt tourism and foreign investment. Flash forward a few months later, and things look different for Thailand and its exchange traded fund (ETF).
Thailand’s Finance Minister raised Thailand’s GDP growth projection, again, to 7.3% to 7.8% from the previous 5% to 6% forecast, reports Tim Johnston for Financial Times. Pessimists believed that Thailand’s economy, with its heavy emphasis on exports at 65% of GDP, would begin to slow as demand from developed countries diminish. [Thailand ETF Rises Above Political Turmoil.]
Exports are expected to increase 25%, vehicle production, which is 11% of GDP, is calculated to jump 66% year-over-year. Thailand”s stock market is at a 14-year high and the baht is also at a 13-year high.
However, Japan, the largest foreign investor in Thailand, recently reported that 67% of companies believe further civil unrest will have an impact on their investment decisions.
Sales of electronics and automobiles boosted the economy’s expansion to 9.1% in the second quarter, but Satit Rungkasiri, head of the ministry’s Fiscal Policy Office, warns that a strengthening baht and weaker economic recovery in the developed countries will hamper Thailand’s second-half growth, writes Suttinee Yuvejwattana for Bloomberg. [The Potential of Emerging Market ETFs.]
For more information on Thailand, visit our Thailand category. If you’re looking for exposure to Thailand, the ETF is well above its long-term trend line. Be mindful of the risks – politically, there’s turmoil that remains – and have an exit strategy if the upset derails this ETF’s performance.
- iShares MSCI Thailand Invest Mkt Index (NYSEArca: THD) is up 23% in the last three months
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.