BoT ready for political obstacles
Prasarn says strategy can manage setbacks
published : 2 Nov 2013 at 00:00
newspaper section: Business
writer: Pathom Sangwongwanich
The Bank of Thailand stands ready to manage the country's economy through any short-term setbacks that could crop up from heightening political tensions following speedy passage of the controversial amnesty bill.
Governor Prasarn Trairatvorakul said since the central bank is responsible for maintaining economic stability, it is monitoring the political situation and has prepared policy tools to manage the country's economy if needed.
Passage of the blanket amnesty bill, which will exonerate those who have been accused of politically related crimes from 2004 to August 2013, has some onlookers expecting violence.
Mr Prasarn said protests against the amnesty bill reflect a positive social attribute and suggest Thai society does not have entrenched beliefs.
Many factions who support the government have expressed their disagreement with the amnesty bill, showing differing social groups can agree on what is reasonable and oppose what they view as unjustified, he said.
In fact, foreign investors are observing how efficient Thai society is at managing conflict, seeing its logical reasoning, said Mr Prasarn.
The political situation triggered a selling spree in the Thai stock market from the opening bell yesterday, although bargain hunting in late trade wiped out some losses.
The SET index closed yesterday at 1,429.08 points, down 13.8, in thin trade worth 29.4 billion baht.
Tisco Securities vice-president Apichat Poobunjirdkul said anxiety the US Federal Reserve will likely start tapering its massive stimulus in the coming months also weighed on market sentiment.
The pullback in Thai shares could continue next week due to lingering political concerns, but support at 1,400 points and next at 1,380 will not be breached, and investors are recommended to pile up shares at those levels.
"The political situation is a short-lived problem," said Mr Apichat, adding that investors should also keep an eye on the Nov 11 International Court of Justice ruling on Preah Vihear Temple.
Mr Prasarn said the country's economy is on the path to recovery thanks to a global economic pickup, although some headwinds still lie ahead.
Despite delays in budget disbursement in the previous fiscal year, public investment in infrastructure and water management projects can partially help stimulate economic growth next year.
September's dismal export results raised recovery concerns. Exports unexpectedly contracted by 7.09% year-on-year to US$19.3 billion after a 3.9% expansion in August. They grew by a mere 0.05% year-on-year in the first nine months to $172 billion.
The central bank's growth forecast for next year is in line with the country's growth capability at 4-5%, which is considered satisfactory, said Mr Prasarn.
The Bank of Thailand recently slashed its 2013 growth projection to 3.7% from 4.2% and cut next year's growth forecast to 4.8% from 5%.