The Thai economy and stock market could benefit from China's economy, which performed better than expected during the third quarter, according to analysts who expressed hopes that Beijing will launch more stimulus measures later this year.
Koraphat Vorachet, head of research at Krungsri Capital Securities, said China’s GDP growth of 4.9% in the third quarter beat the market estimate of 4.5%, indicating government policies have effectively lifted the economy.
In the first nine months of 2023, the mainland’s economy expanded by 5.2% and remains on track to achieve the full-year target of 5%, he said.
“A Chinese rebound would positively impact economies across Asia, including Thailand,” said Mr Koraphat.
“As manufacturing activities on the mainland rebound, bulk carriers and petrochemical companies on the stock market should benefit.”
He said he expects more stimulus measures to be announced by the Chinese government later this year.
After China’s National Bureau of Statistics released third-quarter GDP data yesterday, JP Morgan upgraded its growth estimates for the world’s second-largest economy this year to 5.2% from 5%, while Citigroup and Swiss banking giant UBS did the same.
Nomura, a Japan-based financial services group, raised China’s growth forecast this year to 5.1% from 4.8%.
However, the International Monetary Fund slashed China’s GDP outlook from 5.2% to 5% this year and from 4.5% to 4.2% for 2024, citing weakness in the property sector.
Kasikorn Research Center (K-Research) said stimulus policies, including interest rate cuts to increase consumption of goods and services as well as tax incentives for purchases of electric vehicles and new homes, prompted third-quarter GDP to beat the forecast.
Retail sales beat the target of 5.5% growth year-on-year, while car sales rose 2.8% over the period.
“After the reopening, China’s service sector expanded 6% on an annualised basis in the first nine months, with catering and accommodation surging 14.4% year-on-year, while retail sales rose 6.8% over the same period, indicating the recovery of domestic consumption,” said K-Research.
The think tank noted the Chinese economy still faces some challenges for the remainder of 2023 to achieve the government’s target of 5% growth this year, as domestic consumption has not yet fully recovered, while property firms are battling high levels of debt.
Beijing is likely to introduce more stimulus measures later this year, particularly fiscal policies and additional measures to revitalise the property sector, such as the extension of the loan repayment period for real estate companies.
The 20th National Congress of the Chinese Communist Party is also expected to increase the budget deficit, now set at 3% of GDP, to serve the issuance of 1 trillion yuan worth of government bonds to fund infrastructure projects, said K-Research.