Thai baht on upward trend

 Yet, lingering concerns on the global economy mainly the eurozone debt crisis as well as oil spikes which would pressure Thailand's current account surplus, the baht would be weakened. The economic house expected the baht to move in the range of 29.50-32.50 per dollar this year.
 The baht has past the lowest level and now it is heading up, said Wiwan Tharahirunchote, executive chairman. The level would depend largely on inflows and outflows, she added.
 According to the research centre, while net inflows to the stock exchange so far this year have amounted to Bt74 billion, inflows to the Thai bond market are as high as Bt100 billion.
 In the near term, this is not expected to encourage the Bank of Thailand to raise the policy rate in the next 3-6 months. Still, should global risks heighten and oil prices further increase, the central bank may raise the policy rate in the last quarter.

Higher wage is expected to raise the inflation by 0.6-0.7 percentage point.

The house expected inflation to average 3.9 per cent this year, while the economy should expand at 5 per cent. Pimolwan Mahajchariyawong, assistant vice president, Kasikorn Research Centre, said that inflation could spike to 4 per cent in the latter half due to oil prices and higher wage, from 3.5 per cent in the first half.
 While saying that the eurozone debt crisis is not yet over and will further pressure the global economy and Thailand, which should witness greater volatility in stock markets and exchange rates, Pimolwan did not expect the conflict in the Middle East to develop into to a full war. She said that as the US is holding the presidential election, all wars should be avoided. In this situation, though Saudi Arabia is raising output, if the conflict is prolonged, average oil price this year could rise 84 per cent from 2011 to US$195 per barrel.