Fund executive suggests 30% cash allocation, as living costs rise

Thai investors should hold up to 30% of their financial portfolio in cash as the cost of living in Thailand continues to rise, a senior fund executive said, as inflationary pressures build in Southeast Asia’s second-largest economy.

Nasu Chumsom, Deputy President of LH Fund, said higher oil prices and global uncertainty are driving up inflation, underscoring the need for liquidity and flexible investment strategies.

He said that holding 30% in cash could help cushion the impact of soaring living costs and allow investors to take advantage of market downturns.

“Once inflation starts rising, every product becomes more expensive, including stocks and commodities. So, you have to position yourself with 30% in cash, 30% in equity markets, and another 30% in commodity-related stocks,” he noted.

Thailand’s SET stock index has fallen about 4% from its February peak, dropping from 1,528.26 to 1,454.00 as of 3 April, reflecting heightened volatility following geopolitical tensions in the Middle East.

However, the fund executive explained that capital flows into Thailand were positive at the beginning of the year, with some outflows occurring after the war. 

He added that “we expect more inflows into this part of the world. People are actually taking money out of the US and putting it to work more in Asia and other growing economies like ours.”

Inflation remains the key concern, he added, as rising energy costs ripple through the economy, pushing up transportation expenses, weakening consumer purchasing power and weighing on growth.

According to one of Thailand’s major petroleum providers, Bangchak, diesel prices have reached a new historic high of 50.54 baht per litre as of 6 April 2026.

Due to persistent tensions in the Middle East and rising domestic costs, the Joint Standing Committee on Commerce, Industry and Banking has lowered Thailand’s 2026 GDP growth forecast from a high of 2% to 1.6%.

The group also projected that Thailand’s inflation rate could rise to as high as 3%, up from 0.7%.

Nasu said the Bank of Thailand may face constraints in easing monetary policy further, noting that interest rates are already low after the central bank reduced its benchmark rate to 1.00% in February.

To address the ongoing crisis, he urged the Ministry of Commerce to implement price controls on essential goods, as transportation costs are rising due to the energy crisis.

“For example, if goods are transported from northern Thailand to the south, transportation costs could increase by close to 5%. The ministry needs to help control prices in vulnerable sectors to alleviate economic pressures,” he said.