Many research houses fear that the momentum of the Thai economy is weak and the MPC may cut interest rates this year.

Krungthai" expects Thai GDP this year to grow 2.7%, but UOB still estimates it will grow 3.6%, suggesting the business sector prepare for a new global economic reset. SCB and EIC expect MPC to decrease this year. Interest rates after Thai economic momentum - weak inflation Dr. Pacharapoj Nantaramas, Executive Vice President and Chief Economist of Krung Thai Bank, revealed that the Krungthai COMPASS Research Center estimates that the Thai economy in 2024 will expand at a limited level of 2.7% due to a limited recovery in exports. It may expand only 1.8% due to the economy of main trading partners slowing down. especially the United States and China, while income from the tourism sector is still lower than before COVID-19. The number of foreign tourists increased from the previous year to 34 million, but was still lower than the normal number of 40 million, despite the visa-free policy. In addition, Thailand has a high level of debt. Private consumption may slow down. from the high level of household debt Mea nwhile, some private businesses are facing difficulties in repaying their debts. In the part where funds are raised through debt instruments There may be higher costs for issuing bonds and compensating for risks. The global economy risks a major reset. from geopolitical conflicts Financial conditions are tight around the world. and the uncertainty of the US economy and China in the future Advise entrepreneurs to diversify the market to reduce risk. Major businesses and SMEs join together to increase competition. UOB Bank (Thailand) assesses the direction of the Thai economy in 2024. It is expected that this year the Thai economy will grow by 3.6%. The main factors that help promote the growth of the Thai economy are: Product export sector and the tourism sector that tends to improve This will have a positive impact on employment and create income for workers. Especially in the service sector Along with household consumption, which will remain strong and benefit further from government spending stimulus measu res. Causing the growth of the Thai economy to improve along with the recovery of demand from abroad. This will be a positive fundamental factor, resulting in the baht becoming stronger, as well as increased foreign direct investment (FDI) from foreign companies that move their production bases into the country. To avoid the risk of impacts from geopolitical tensions. Evaluate the baht's appreciation. and was at the level of 34.8 baht/US dollar in the first half of the year. and is likely to strengthen at the level of 33 baht/US dollar in the second half of the year. Center for Economic and Business Research Siam Commercial Bank (SCB EIC) assesses the overall picture of the Thai economy this year. At the beginning of the year, there is still momentum from private consumption that is likely to expand well. This follows the recovery of the tourism sector which has accelerated mainly from Chinese tourists. However, the supply side of the Thai economy is still weak. Especially the manufacturing sector which cont inues to shrink in many industries. and there is still no clear sign of recovery. looking forward Inflation tends to increase and is expected to return to expansion in the second quarter mainly from inflationary pressure on the supply side. In addition, the government sector may gradually reduce energy assistance in the second quarter after world energy prices drop. and oil funds have begun to have much higher debt burdens. SCB EIC still expects to see a reduction in the policy interest rate this year for the following reasons: The economy and inflation are much weaker this year, for example, if the Thai economy grows to 2.5% and the inflation trend is much lower than the 1-3% range. The Monetary Policy Committee (MPC) views that the policy interest rate is in line with the growth potential of the Thai economy (Neutral rate) that is lower due to structural factors. It should be lower than previously assessed, as reflected by the MPC's resolution not being unanimous in the results of the meeting on February 7, 2024 that began considering this issue. As for the baht, it depreciated quickly at the beginning of the year. But the pressure on the baht's depreciation will begin to decrease because the market has priced out the interest rate cuts of the Federal Reserve (Fed), and the pressure on the depreciation of major currencies in the region will decrease. However, we still maintain our view on money. The baht will gradually strengthen to a level of 32.50-33.50 baht/dollar at the end of this year. While central banks of major economic countries will begin to adjust the direction of monetary policy in the second quarter. It is estimated that the US Federal Reserve (Fed), the European Central Bank (ECB) and the Bank of England (BOE) will begin to reduce the policy interest rate in the second quarter in line with the direction of inflation that has begun. slow down The Bank of Japan (BOJ) is likely to end its negative interest rate policy in the third quarter (or as soon as the second quarter), while the People's Ban k of China (PBOC) is likely to continue easing monetary policy. through a reduction in the policy interest rate and the minimum reserve ratio of commercial banks (RRR). -511- Thai News Agency Source: Thai News Agency