Fetco eyes interest rate cuts for rebound

Fetco eyes interest rate cuts for rebound

Recovery possible from second half

People check out travel deals on offer at last weekend's Thai Tiew Thai travel fair. Alongside tourism growth and growing foreign investment in Thailand, Mr Kobsak expects the country's economy to grow by 3% this year. (Photo: Apichart Jinakul)
People check out travel deals on offer at last weekend's Thai Tiew Thai travel fair. Alongside tourism growth and growing foreign investment in Thailand, Mr Kobsak expects the country's economy to grow by 3% this year. (Photo: Apichart Jinakul)

The likelihood of interest rate cuts in the second half would support the rebound of the Thai economy, now facing challenges as many economies are showing signs of slowdown, says the Federation of Thai Capital Market Organizations (Fetco).

Fetco chairman Kobsak Pootrakool said the UK and Japan may have already slid into a recession while China's economy has been suffering from a lingering property crisis.

The global economy would rebound once central banks start to lower their interest rates, which might start later this year.

"Central banks all over the world may keep the current policy rates unchanged until mid-2024. In the second half of this year, those central banks might start cutting rates," he said.

"And if central banks across the globe keep cutting rates every quarter for a half to a full year, this might result in the world economy entering a new recovery stage," Mr Kobsak said.

Amid the slowing of the world economy and the ongoing geopolitical situation, Thailand has so far been boosted by the recovering tourism industry as the number of international arrivals has increased. About 6 million tourists arrived in Thailand year to date, including 1 million Chinese visitors.

Thailand also has vacationers coming from Malaysia and India. According to the Ministry of Tourism and Sports, Thailand welcomed 5.98 million foreign tourists between Jan 1 and Feb 25. Chinese tourists topped the rankings, followed by Malaysians (760,000) and Russians (397,000).

"I think the government's goal to welcome 35 million foreign visitors in 2024 is achievable. The tourism sector might drive the economy this year by 2%," Mr Kobsak said on the sidelines of an event organised by Fetco and the Securities and Exchange Commission (SEC).

Additionally, the government budget for fiscal 2024 will be ready for disbursement in May and exports have started to recover. Alongside tourism growth and growing foreign investment, Mr Kobsak expects the economy to grow by 3% this year.

Speaking at the event, SEC secretary-general Pornanong Budsaratragoon said the commission has a policy to promote investment for communities and social development.

The commission is ready to facilitate companies' access to mobilise funds through the stock market and push all stakeholders towards sustainability.

The SEC has issued criteria to enable fundraising in the capital market via a cloud funding channel and private placement.

The regulator has also issued requirements for sustainable-theme bonds, such as green bonds, social bonds and sustainability bonds. The total funds raised at the end of January through these bonds exceeded 700 billion baht, Ms Pornanong said.

The major issuers of such bonds are in the government sector, including the Ministry of Finance.

The funds raised from these transactions will be used in various investment programmes, such as the development of the the MRT Orange Line, she added.

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