The Thai economy is expected to be resilient to the US debt-ceiling impasse as a result of the country's strong foreign reserves.
Capital inflows will also probably return to push the SET index up to between 1,650 and 1,700 points next year.
Fiscal Policy Office deputy director-general Ekniti Nitithanprapas said Thailand's foreign reserves stand at US$190 billion, exceeding the foreign debt of $130 billion including short-term debt.
The US is expected to raise its borrowing limit, he said, then the markets' sentiment will improve on reduced fears of the impact of a US debt default.
Mr Ekniti said the US and Japan will be recovering next year but that will not affect the Thai economy in the short term as Thailand's exports have shifted from reliance on the US to other continents over the last five years.
"Last year was the first time our exports to Cambodia, Laos, Myanmar and Vietnam reached 8% of total shipments, even higher than shipments to the euro zone at 7%," said Mr Ekniti.
Paiboon Nalinthrangkurn, chairman of the Federation of Thai Capital Market Organisations, said the Thai bourse next year will reach 1,650 to 1,700 points, with a price-to-earnings ratio of about 15 times, thanks to foreign capital inflows worth at least 100 billion baht that will return to emerging markets.
Since the US debt ceiling is likely to be raised, the interest rate is likely to be on the rise along the line, but Mr Paiboon said the rate would not be that high and still lower than the yield of the equity market.
About the author
- Writer: Darana Chudasri
Position: Business Reporter