KASIKORNBANK Economic and Subsidiaries Performance Overview
K
KASIKORNTHAI
ธนาคารกสิกรไทย
开泰银行 KASIKORNBANK
Operating Environment: Economic Outlook for 2023 (as of 27 September 2023)
YOY
Key GDP Forecasts and Assumptions
1.5
2.6
3.0
-6.1
2020
2021
2022
2023F
% YoY
2020
2021
2022
2023F*
Jul 23)
2023F*
(Sep 23)
Key Points:
■Thai GDP is expected to grow 3% from the previous projection of
3.7%
Waning global economic momentum, particularly from Chinese
economic slowdown, will put downward pressure on Thai export
and tourism sector
■ Average headline inflation for 2023 may subside to below 2.0%,
given very low rate in the past few months
■Thai GDP will return to pre-COVID-19 level in 2023
GDP
-6.1
1.5
2.6
3.7
3.0
Private Consumption
-0.8
0.6
6.3
3.8
5.0
Government Consumption
1.4
3.7
0.0
-3.0
-3.2
Total Investment
-4.8
3.1
2.3
1.8
1.6
- Private investment
-8.1
3.0
5.1
2.0
2.0
- Public investment
5.1
3.4
-4.9
2.2
1.3
Gov't Budget Deficit (% of GDP)
-5.2
-4.8
-3.5
-3.8
-3.9
Exports (Customs Basis)
-5.9
17.4
5.5
-1.2
-2.5
Imports (Customs Basis)
-12.7
29.5
13.6
-2.4
-2.4
Current Account (USD bn)
21.2
-10.6
-16.9
9.5
6.5
Headline Inflation
-0.8
1.2
6.1
1.8
1.4
Avg Dubai Oil Price
42.2
68.8
97.0
78.0
84.0
No. of Foreign Tourists (Mn)
6.7
0.4
11.2
28.5
27.6
Policy Interest Rate**
0.50
0.50
1.25
2.25
2.50
Risk Factors:
■Global economic slowdown
Impact from El Niño
■Fed rate hike cycle and Thai Baht volatility
■ Ongoing geopolitical risks
■Household and business balance sheet deterioration
Notes: MPC's policy rate is at 2.50% (as of September 27, 2023)
Source: *KResearch (as of September 26, 2023 vs forecast on July 11, 2023)
** KBank Capital Markets Research (as of September 27, 2023)
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K
KASIKORNTHAI
ธนาคารกสิกรไทย
开泰银行 KASIKORNBANK
Operating Environment: Economic Outlook for 2023 (as of July 2023)
■Global Economy
■Government Stimulus Plan
■Inflation
■Exports and Tourism
■Fed Policy Normalization
■ Baht
Outlook
■Global economy: Global economy expected to decelerate in 2023 amid persistent
inflation, continuous rate hikes by major central banks, and sluggish recovery of China
while uncertainty remains with geopolitical issues and banking sector turmoil
■US: US economy likely to slow in 2023 due to Fed's aggressive interest rate hikes and
tighter credit condition, but may not enter a recession in 2023
■ Eurozone: Eurozone economy likely to slow in 2023 amid elevated inflation and
tightening policy, but may not enter a recession in 2023
■China: Chinese economy expected to expand at a higher rate due to relaxation of
COVID restrictions, but risks remain given ongoing property market slump, weakening
consumer confidence, and global economic slowdown while the prospect of any large
economic stimulus seems less likely
■ ASEAN economies: ASEAN economies will likely experience slower growth amid global
economic slowdown, persistent inflation, and tighter financial conditions
■Delay in government formation and budget approval for the 2024 fiscal year will impact
budget disbursement and implementation of economic stimulus measures, especially in
4Q23 onwards
■Average headline inflation for 2023 may drop to 1.4%, given low rate in 2Q23. However,
inflation may accelerate again due to uncertainty surrounding cost pass-through and
commodity price trend, given threats from severe weather and ongoing geopolitical
tensions
■Thai exports may experience negative growth in 2023, given global economic
slowdown, lower commodity prices, and a high base in 2022
■Tourist arrivals in 2023 expected to accelerate to 27.6 million
■Fed hiked 25bps in July to 5.25-5.50% after a pause in June with a neutral tone
depending on data. The market sees little chance of a Fed rate hike this year
■Fed's interest rate at the end of 2023 expected to be 5.25-5.50% as Fed's hawkish tone
fades while the market anticipates how long Fed can hold the rate
■■Baht weakened to Bt35.00 per USD with USD resurgence and Thai internal factors
■ However, at 2023 year-end, Baht could reach Bt33.50-34.00 per USD, as the Thai
economy continues to recover, thanks to strong support from tourism recovery
Possible Impacts to Thai Economy
■ Thai economy, especially export sector, increasingly
tilted to the downside amid increasing global economic
risks
■Fading government stimuli will weigh on Thai
economic recovery in 2023
■Domestic consumer spending expected to weaken
amid persistent inflation and fading pent-up demand
■ Strong rebound in tourism sector will continue to be
the main driving factor for Thai economy, while export
slump will put downward pressure on Thai economy
■ BOT rate would be near neutral with a data-dependent
method, while inflation continues to drop below BOT's
target range for 3 consecutive months
■■BOT's interest rate expected to remain at 2.50% the
end of 2023
■Rise of USD put pressure on the Thai Baht and Asian
currencies amid fragile China economic recovery
■Looking forward, the recent Thai current account has
surprisingly turned into a surplus with the continuous
recovery of Thai tourism and economy
Source: KResearch (as of September 27, 2023), and
KBank Capital Markets Research (as of September 27, 2023)
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