KBank's Strategic Acquisition in Muang Thai Group Holding
K
KASIKORNTHAI
ธนาคารกสิกรไทย
开泰银行 KASIKORNBANK
Operating Environment: Economic Outlook for 2023 (as of July 2023)
% YoY
Key GDP Forecasts and Assumptions
1.5
2.6
3.7
-8.0
-6.1
2020
2021
2022
2023F
% YoY
2020
2021
2022
2023F*
(Mar 23)
2023F*
(Jul 23)
GDP
-6.1
1.5
2.6
3.7
3.7
Private Consumption
-0.8
0.6
6.3
3.3
3.8
Government Consumption
1.4
3.7
0.0
-1.0
-3.0
Total Investment
-4.8
3.1
2.3
2.3
1.8
- Private investment
-8.1
3.0
5.1
2.8
2.0
- Public investment
5.1
3.4
-4.9
2.3
2.2
Gov't Budget Deficit (% of GDP)
-5.2
-4.8
-3.5
-3.8
-3.8
Exports (Customs Basis)
-5.9
17.4
5.5
-1.2
-1.2
Imports (Customs Basis)
-12.7
29.5
13.6
-2.4
-2.4
Current Account (USD bn)
21.2
-10.6
-16.9
6.0
9.5
Headline Inflation
-0.8
1.2
6.1
2.8
1.8
Avg Dubai Oil Price
42.2
68.8
97.0
80.0
78.0
No. of Foreign Tourists (Mn)
6.7
0.4
11.2
28.5
28.5
Policy Interest Rate**
0.50
0.50
1.25
2.00
2.25
Notes: MPC's policy rate is at 2.00% (as of May 31, 2023)
Source:
Key Points:
■Thai GDP is expected to grow 3.7% in 2023, driven by a strong
rebound in tourism sector
■However, waning global economic momentum will put downward
pressure on Thai export sector
■Meanwhile, domestic political uncertainty would add downside risks
to the Thai economy
■The average headline inflation for 2023 may subside to the level
lower than 2.0%, given very low rate in the past few months
■Thai GDP will return to its pre-COVID-19 level in 2023
Risk Factors:
■Uncertainty from political issues in Thailand
■Global economic slowdown
■Uncertainty from Western banking turmoil
■ Volatility in energy and other commodity prices
■Fed rate hike cycle and Thai Baht volatility
■ Ongoing geopolitical risks
■Household and business balance sheet deterioration
COVID-19 Vaccination rate in Thailand*** (March 10, 2023): First dose 82.8%, Second dose 77.8%, Third dose and more 50.3% of targeted people
KResearch (as of July 11, 2023 vs forecast on March 31, 2023)
** KBank Capital Markets Research (as of July 5, 2023)
*** Ministry of Public Health
บริการทุกระดับประทับใจ
5
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
Source: KResearch (as of May 8, 2023), and
Outlook
■ Global economy: Global economy is expected to decelerate in 2023 amid persistent
inflation and continuous rate hikes by central banks around the world while uncertainty
remains with geopolitical issues and banking sector turmoil
■US: US economy is likely to face a significant slowdown in 2023 due to Fed's
aggressive interest rate hikes while banking sector turmoil may pose additional risks to
the economy
■ Eurozone: Eurozone economy is likely to face a significant slowdown in 2023 amid
elevated inflation and tightening policy
■China: Chinese economy is expected to expand at a higher rate due to relaxation of
COVID restrictions, but risks remain given ongoing property market slump and global
economic slowdown
■ ASEAN economies: ASEAN economies will likely experience slower growth amid global
economic slowdown, persistent inflation, and tighter financial conditions
■The 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
■The average headline inflation for 2023 may subside to the level lower than 2.0% as
fuel prices are likely to be lower than last year despite OPEC oil production cut.
However, inflation is unlikely to drop rapidly, given ongoing cost pass-throughs and
lower government subsidies
■Thai exports may experience negative growth in 2023, given global economic
slowdown, lower commodity prices, and a high base in 2022
■The number of tourist arrivals in 2023 is expected to accelerate to 28.5 million
■The Fed paused its rate hike in June, but Fed's dot plots said that the hiking cycle has
not been over yet with two mote hikes, but the markets expect only one more rate hike
■Fed's interest rates at the end of 2023 are expected to be 5.25-5.50%
■ Baht weakened amid uncertainties from Fed moves and Thai internal factors pushing
THB above 35.00 per USD late-June
■However, at 2023 year-end, Baht could reach 33.50-34.00 per USD, as the Thai
economy continues to recover, thanks to strong support from tourism recovery, amid
some pressure from slowed exports.
KBank Capital Markets Research (as of July 5, 2023)
บริการทุกระดับประทับใจ
Possible Impacts to Thai Economy
■Thai economy, especially export sector, is increasingly
tilted to the downside amid increasing global economic
risks
■Fading government stimuli will weigh on Thai
economic recovery in 2023
■Domestic consumer spending is 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 the Thai economy, while
export slump will put downward pressure on the Thai
economy
■ BOT expressed a hawkish tone for its gradual hiking
path, amid decreasing inflation
■ BOT's interest rate is expected to be 2.25% at the end
of 2023.
■Recently, Baht has moved correlatedly with gold price,
while the weakening of the Yuan and Yen put
pressure on Asian currencies
■Looking forward, the continuous recovery of Thai
tourism will bring the current account back to surplus
in 2023, while pressure from energy prices has
lessened, amid concern over the recession
6View entire presentation