Thailand’s SET Index closed at 1,408.17 points, increased 7.06 points or 0.50% with a trading value of 44.37 billion baht. The analyst stated that the Thai stock market performed better than the regional market, as there were cover shorting activities after the Stock Exchange of Thailand (SET) revealed an outstanding short positions, and positive sentiment from the resolution of the Monetary Policy Committee to hold interest rates, affecting the Thai baht to slow down its weakening rate and the fund flow to rebound into the market. The clarification for the digital wallet scheme slightly benefited the market as the period for the measure was set later than expected while also having limitations to the use of the money.
The analyst expected the market to edge higher with range limit as investors kept their eyes on the volatility of the market ahead of the Songkran Festival holiday.
Fitch Ratings has revised the long-term foreign-currency issuer default rating (IDR) outlook of China from ‘stable’ to ‘negative’ while affirming the IDR at ‘A+’. The move reflects increasing risks to China’s public financial outlook amid the country’s economic transition away from growth reliant on property and rising government debt. On the other hand, China’s ‘A+’ rating is supported by its diversified economy, relative solid GDP growth prospects, essential role in global trade, robust external finances, and the yuan’s reserve currency status.
Fitch has pointed out an increasing fiscal stimulus as the government tries to counter economic headwinds, forecasting the general government deficit to rise to 7.1% of GDP in 2024 from 5.8% in 2023. With limited clarity on reform measures supporting medium-term fiscal consolidation and eroding revenue base, the debt ratio is projected to rise to 64.2% in 2025 and almost 70% by 2028.
The Monetary Policy Committee (MPC) announced the outcome of the meeting on 10 April 2024, voting 5 to 2 to maintain the policy rate at 2.50 percent. Two MPC members voted to cut the policy rate by 0.25 percentage point.
The Thai economy is projected to grow in 2024 at a higher rate than the previous year with continued support from private consumption and tourism, along with public expenditure which is anticipated to accelerate for the remainder of the year. Meanwhile, structural headwinds continued to weigh on export recovery. Inflation remains subdued from supply factors and government subsidies and is projected to gradually increase towards the target range by the end of 2024. The majority of the Committee deems that the current policy interest rate is conducive to safeguarding macro-financial stability, and that the effectiveness of monetary policy on resolving structural impediments is limited. Most members thus voted to maintain the policy rate at this meeting, but will monitor uncertainties of economic factors going forward.
Thailand’s Prime Minister and Finance Minister Srettha Thavisin on Wednesday kicked off the 10,000 baht handout through the Digital Wallet project, expecting to officially launch in the fourth quarter of this year.
The policy aims to cover 50 million eligible citizens with the total funds amounting to 500 billion baht.
The funds will come from three main sources including 152 billion baht from the 2025 fiscal budget, 172 billion baht from the Agricultural Bank and 165 billion baht from the central budget.
The PM said that the cash handout will boost the economy by 1.2-1.6%.
