The Bank of Thailand is projected to cut interest rates in the first half of 2025 as the country needs support from both fiscal and monetary policies to spur economic growth, says Kasikorn Asset Management (K-Asset).
The country's GDP growth is expected to rebound in the fourth quarter of 2024 and the first quarter this year thanks to the government's stimulus schemes, including the 10,000-baht cash handout, Easy E-Receipt programme, and the daily minimum wage hike, said Win Phromphaet, executive chairman of K-Asset.
"The global economy is undergoing significant changes. Similarly, Thailand faces various structural challenges, including an ageing population and high household debt," said Mr Win.
"These factors have a profound impact, both positively and negatively, on investment returns in both domestic and international financial markets."
Easing both fiscal and monetary policies would drive economic growth in the medium and long term, he said.
As the government is expected to continuously launch additional stimulus, monetary policy is likely to be gradually reduced going forward, said Mr Win.
The Federal Reserve is expected to cut the US policy interest rate twice this year, following a reduction of 25 basis points in December 2024, according to K-Asset.
Investors have offloaded government bonds from their portfolio due to uncertainties surrounding the policies of President Donald Trump and the Fed, as well as a potential increase in US inflation, said the firm.
K-Asset expects the Stock Exchange of Thailand to move in a range of 1,500-1,550 points this year, with earnings of listed companies surging 10.5%.
The company unveiled its annual K-Asset Capital Market Assumptions research yesterday, powered by JPMorgan Asset Management.
The study provides a comprehensive outlook on global economic trends, asset returns, risks for more than 100 asset classes over 10-15 years, strategic asset allocation guidelines, and age-based solutions for long-term investment decisions.
The in-depth insights in the research can serve as a roadmap for investors navigating the changing economic landscape to enable long-term investment decisions, said Mr Win.