Economy set for boost post-Paris attacks: NIDA
THAILAND COULD benefit from the Paris terror attacks as they could adversely affect European economies and result in an inflow of capital to Asia, according to the National Institute of Development Administration.
NIDA executive Montri Sokatiyanurak also said more foreign tourists, particularly Chinese and Japanese, could switch travel plans and instead of travelling to France might come to Asia.
Thailand would obviously benefit from that.
He said if that happened and Thailand sped up the disbursement of its investment budget for fiscal 2016, the country’s gross domestic product could expand by 3.5 per cent this quarter.
That would take this year’s growth to 3.0 per cent, he said.
At present, only 4 per cent of the investment budget has been disbursed.
The Paris attacks have led to a slowdown in economic activity and are expected to affect economies across Europe in the short term.
France is the second-largest economy in the European Union, accounting for 14.7 per cent of Europe’s total economy.
Short-term capital movement
The European Central Bank is expected to implement an economic stimulus package through a 65-billion-euro (Bt2.47 trillion) quantitative easing programme, and this could prompt short-term capital movement and euro fluctuations.
“The Thai stock market and economies in Asia could gain from the likely capital movement. Mostly, foreign capital is expected to move into Asian stock markets, particularly Thailand’s. The baht is also expected to be volatile in the short term,” Montri said.
Capital is forecast to flow into less risky assets including gold, and its price could be higher in the short term. It is currently priced at around US$1,080 per ounce.
Given the Paris attacks and low inflation of 1.5 per cent, the US Federal Reserve is expected to leave its interest rates unchanged when it meets next month.
