Thailand’s SET Index closed at 1,361.10 points, increased 3.64 points or 0.27% with a trading value of 38.53 billion baht. The analyst stated that the Thai stock market increased slightly higher than the regional markets, as it was supported by the rise in tech stocks.
The analyst expected the market to slightly decrease tomorrow, while suggesting investors to monitor the announcement of 1Q24 earnings reports from Thai listed companies, especially the ones related to energy. As for factors from foreign countries, the analyst recommended keeping eyes on the 1Q24 earnings reports from tech companies.
Minutes of the Bank of Thailand’s monetary policy meeting on April 10, 2023 showed that Thailand’s economy is predicted to expand at a quicker rate in 2024 compared to 2023, driven by strong private consumption and a resurgence in tourism, while the financial system remains resilient. However, uncertainties continue to linger.
At the meeting, the Bank of Thailand revised its 2024 economic growth forecast to 2.6% from a previous projection of 2.5%-3.0%. This is much lower than the 4% projected by the Thai government.
This came after a shrinkage of economic growth by 0.6% in the final quarter of 2023 from the third quarter. Full-year growth came in at 1.9%, which was slower than expected by economists, and also below 2.5% rise in 2022.
During the meeting, the committee voted 5-2 in favor of maintaining the one-day repurchase rate at 2.50%, the highest level in over ten years, for the third consecutive session. While the majority opted for unchanged rates, two members advocated for a reduction of a quarter-point.
The upcoming assessment of interest rates is scheduled for June 12.
Bank of Thailand (BOT) officials revealed on Wednesday that it has engaged in interventions in the currency markets as necessary to mitigate excessive fluctuations in the baht, while the existing robust policy rate is supportive of the ongoing economic recovery efforts, according to the report by Reuters.
Assistant governor Piti Disyatat indicated that, despite heightened volatility, the baht’s movements are consistent with those of regional currencies. His statements follow the baht’s recent dip to over a six-month low beyond 37 baht to the dollar.
The BOT does not have specific exchange rate targets for the baht but assured that the current interest rates are resilient and capable of managing potential economic risks.
The central bank expressed readiness to make adjustments to the policy rate if deemed essential, while also highlighting that substantial rate reductions are presently deemed inappropriate and unlikely to facilitate financial accessibility for small enterprises.
Oxford Economics stated that global food prices are projected to decrease in 2024, signaling potential relief for consumers. The economic advisory firm highlighted that a significant factor behind this anticipated decline in food commodity prices is the ample supply of key crops, particularly wheat and maize.
The recent surge in production of staple crops has led to a consistent drop in prices, with wheat futures experiencing a nearly 10% decline year-to-date and maize futures seeing a decrease of around 6% over the same period, according to FactSet data.
However, while wheat and maize prices have exhibited a decline, the rice market is witnessing a contrasting trend with prices steadily climbing. Export restrictions imposed by India, a significant rice producer, combined with poor harvests in the country have constrained global rice supplies, leading to an over 8% increase in rough rice futures year-to-date.
While current prices may be at a floor, Oxford Economics’ Lead Economist Kiran Ahmed stated that a gradual increase in prices is anticipated in the latter half of 2024.
The return of buyers from Africa and Asia to the wheat market could lead to a resurgence in prices, while high prices in rice could also prompt India to impose further export restrictions.
The note concluded that while a subdued price trajectory is the base case for this year, there is a risk of sharper price rebounds that could sustain food price inflation and continue to place pressure on consumers.
