KASIKORNBANK Strategic Acquisition

K KASIKORNTHAI ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Operating Environment: Economic Outlook for 2022 % YoY Key GDP Forecasts and Assumptions 1.5 2.9 10.0 2.2 0.0 -10.0 -6.2 2019 2020 2021 2022F Key Points: ■KResearch upgraded 2022 economic growth forecast to 2.9% from 2.5%, mainly due to better-than-expected recovery of foreign tourist arrivals ■Rising inflation would remain the key threat for the Thai economy ■Elevated commodity prices, less government subsidy and higher cost pass-through would drive headline inflation to around 6.0% ■Waning global economic momentum would put downward pressure on Thai export sector ■Thai GDP may return to its pre-COVID-19 level in 2023 Risk Factors: ■Global economic slowdown % YoY 2022F* (Previous) 2022F* 2019 2020 2021 Base Case Base Case GDP 2.2 -6.2 1.5 2.5 2.9 Private Consumption 4.0 -1.0 0.3 1.7 2.9 Government Consumption 1.6 1.4 3.2 -0.2 -1.0 Total Investment 2.0 -4.8 3.4 2.8 2.6 - Private investment 2.6 -8.2 3.3 2.8 3.0 - Public investment 0.1 5.1 3.8 4.4 2.7 ■Fed rate hike cycle and Thai Baht volatility Gov't Budget Deficit (% of GDP) -2.9 -5.2 -4.8 -4.9 -4.9 Exports (Customs Basis) -2.6 -5.9 17.4 3.4 7.8 Imports (Customs Basis) -4.8 -12.7 29.5 7.4 14.5 Current Account (USD bn) 38.0 21.2 -10.6 -3.7 -6.8 ■Escalated inflationary pressure ■Russia-Ukraine crisis ■Household and business balance sheet deterioration Headline Inflation 0.7 -0.8 1.2 4.5 6.0 ■New variant of COVID-19 Policy Interest Rate** 1.25 0.50 0.50 0.75 1.00 Notes: MPC's policy rate is at 0.50% (as of June 8, 2022) COVID-19 Vaccination of Thailand (June 27, 2022): First dose 81.9%, Second dose 76.4%, Third dose 42.4% of targeted people*** represents a higher base case assumption, comparing with the previous forecast, represents a lower base case assumption, comparing with the previous forecast Source: *KResearch (as of June 28, 2022 vs forecast on March 25, 2022) **KBank Capital Markets Research (as of June 16, 2022) *** Ministry of Public Health บริการทุกระดับประทับใจ K KASIKORNTHAI ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Operating Environment: Economic Outlook for 2022 ■Global Economy ■Government Stimulus Plan ■Inflation ■Exports and Tourism ■Fed Policy Normalization ■ Baht Outlook ■Global economy: Global economy is expected to decelerate in 2022 amid ongoing Russia-Ukraine tensions, China's economic slowdown and the move towards tightening monetary policy by the central banks around the world ■US: US economy is expected to grow at a slower rate amid ongoing risks from surging inflation, supply chain bottlenecks, and Fed's aggressive tightening ■ Eurozone: Eurozone economy is expected to grow at a slower pace, given the Russia- Ukraine tensions, rising inflation, supply chain bottlenecks and tightening policy ■China: Chinese economy will continue to face strong headwinds due to strict zero-COVID policy, property market slump, and global economic slowdown ■ ASEAN economies: ASEAN economies on track to rebound in 2022, supported by reopening of economic activities. However, the Ukraine crisis and slower global economic growth momentum together with capital market volatility could pose risks to the economic recovery of ASEAN countries ■The government has limited space for additional stimulus while they may be less inclined to borrow more, given that they expect the economy will continue on its recovery path, driven by a rebound in tourism sector ■Inflation is expected to rise to 6.0% on the back of elevated commodity prices in the global market, higher cost pass-through on consumers across the CPI basket and less government subsidy on energy prices ■ Exports will grow at a slower pace in the 2H22 due to sluggish momentum of the global economy ■Tourist arrivals will significantly recover from last year. Overall number of tourist arrivals is estimated at 7.2 million persons for this year ■The Fed increased its interest rate by 75bps to 1.50-1.75% in June 2022, instead of 50bps initially expected, after U.S. inflation rate in May unexpectedly accelerated to 8.6% YoY, 41-year high. The Fed also signaled more interest rate hikes to curb inflation ■Baht continues to weaken above Bt34 per USD amid strong USD as sign of more Fed's tightening policy At the end of 2022, Baht would reach 33.50 per USD as improvements of Thai economy and current account surplus from a recovery of tourism ■Also, BOT would raise its interest rate in 3Q22, mainly due to inflation concern, supporting Baht and narrowing interest rate gap Source: KResearch and KBank Capital Markets Research (as of June 28, 2022) บริการทุกระดับประทับใจ Possible Impacts to Thai Economy ■Thai economy is highly vulnerable to rising inflation and fading global economic growth ■Stimulus measures may help alleviate consumers burden for only some period of time amid persistent inflation. Stimulus measures may not be able to help much ■High inflation could drive up the cost of producers and deteriorate purchasing power of consumers ■Strong rebound in tourism sector would give a boost to the Thai economy ■Rising Thai inflation, global tightening pressures and interest rate gap will force the BOT to raise its interest rates twice this year, once in 3Q22 and once 4Q22 High fluctuation in USD/THB puts more pressure towards inflation via oil imports and makes revenue management more difficult for exporters and importers ■However, global trade remains supportive of Thai exporters' revenue and investment 5 6

View entire presentation