Thailand’s economy and its related exchange traded fund are pulling through and if the cards are played right, positive growth may be just on the horizon.
Economic data for the second quarter reveals that the worst may be over for Thailand, writes Supunnabul Suwannakij for The Wall Street Journal.
- External demand for Thailand’s goods is recovering, domestic consumption is increasing and the government is spending more.
- Ampon Kittiampon, head of the National Economic and Social Development Board, expects the Thai economy to likely show year-to-year growth by the fourth quarter.
- Finance Minister Korn Chatikavanij stated that Thailand’s government will put $31.3 billion into three-year investment programs in transportation, health and education, which could boost the economic growth by 2.5% per year, report Daniel Ten Kate and Haslinda Amin for Bloomberg.
- The government expects growth to resume in 2010 as both internal and external demand grow.
But some risks remain, such as a possible hit to tourism from the swine flu outbreak, Thailand’s political instability and higher production costs with rising oil prices.
The economy contracted 4.9% in the second quarter year-over-year, but grew 2.3% compared to the first quarter. The government estimates that GDP could decline as much as 3.5% in 2009, followed by an expansion by as much as 3% in 2010.
- iShares MSCI Thailand Invest Mkt Index (THD): up 61.5% year-to-date
Max Chen contributed to this article.