Strong immunity saves Thailand's economy: Prasarn
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Thailand's foreign reserves on January 24 slightly rose from the previous week, with the net reserves of US$189.7 billion.
Of total, the net forward position on January 24 reached $22.5 billion, according to Bank of Thailand's data.
In the previous week, net reserves stood at $189.1 billion including $22.7 billion in net forwards.
Bank of Thailand governor Prasarn Trairatvorakul said on Friday that foreign investors have maintained confidence in the Thai economy. He said that among emerging markets, Thailand has suffered less than others in terms of capital outflows in the past two weeks amid anticipation of the US tapering on the quantitative programme.
He said that a survey showed that they are still confident in the economic fundamentals. Plus, rating agencies like Moody's Investors Service and Standard & Poor's Ratings Services have maintained the sovereign credit ratings for Thailand.
He noted that this contributed to strong immunity in four areas: low inflation and favourable trade balance; flexible foreign exchange rates; foreign reserves which are about 50 per cent of gross domestic product (GDP) against the global average of 20 per cent; and strength of the private sector particularly the banking sector.
However, he noted that prolonged political conflicts could weaken the immunity. If the new government cannot be formed in the first half, this would affect the budgeting and the private sector would feel the negative impacts. This would hurt the operating cost and delay investment opportunities, particularly in the infrastructure which would also affect the country's competitiveness.
