Thai Stock Market and Economic Projections for 2025

Analysts anticipate further gains for Thai SET but predict a sell-off before Trump’s 2025 inauguration. Global economic growth remains stagnant, with geopolitical tensions highlighted. Investors are closely monitoring U.S.-China relations, as trade policies and diplomatic strains could significantly impact global markets.

In 2025, Thailand’s economy and stock market are projected to experience various influences based on both domestic and international factors:

Economic Growth: The Thai economy is expected to grow by 2.4% to 3% in 2025. This projection aligns with forecasts from sources indicating that the GDP growth could reach 2.9% for the year, with a slight improvement over 2024’s growth rate. The Bank of Thailand (BOT) anticipates this growth, particularly driven by sectors like tourism, which is expected to see nearly record-high visitor numbers, with estimates around 40 million tourists.

Stock Market: The SET Index is targeted to reach 1,500 points in 2025 suggesting a continued recovery path. This is backed by expectations of a synchronized global economic recovery, interest rate cuts in developed economies, and accelerated Thai budget disbursement. InnovestX Securities has highlighted stocks like ADVANC, KCE, OSP, PTTGC, and TU as top picks for the second half of 2024, which could continue into 2025 given the global economic rebound and domestic policy support.

Inflation and Interest Rates: Inflation is projected to remain relatively low, with forecasts suggesting figures between 0.8% to 1.2%. This low inflation environment could be supported by the central bank’s policies, with a possible interest rate cut expected in December 2024, lowering the rate to around 2% as domestic demand softens. This move is anticipated to stimulate economic activity further into 2025.

Export and Tourism: Exports are expected to grow by 1.5% to 2.5% in 2025, although this is lower than previous years, indicating some challenges in maintaining export competitiveness. However, the tourism sector is poised to be a significant driver, with recovery in international tourist arrivals playing a pivotal role in economic expansion.

Overall, while the Thai economy and stock market are on a path of recovery in 2025, the growth is expected to be moderate and supported primarily by domestic consumption, tourism, and strategic government measures. However, external factors like global trade policies and internal political stability will be crucial in shaping the actual outcomes

The stock market is expected to benefit from several key themes driving growth in 2025:

• True Corporation: Set to capitalize on the telecommunication and power plant sectors, with significant earnings growth anticipated due to investments from major technology companies in data centers.
• AMATA: Poised for significant growth with a projected market cap of $1,008 million and a promising PE ratio trajectory from 16.4x in 2023 to 11.8x in 2025, benefiting from the influx of data centers and entertainment complexes.
• CP All: Expected to be a major beneficiary of government policies aimed at boosting consumption and reducing household debt, with a forecasted EPS growth of 11.1% in 2025 and a significant improvement in its PE ratio.
• Kasikornbank: Anticipated to gain from the policy rate normalization due to its strong financial positioning, with a market cap of $11,209 million and a robust ROE of 9.1%.

Key Events to watch in Asia 2025

China’s persistent challenges, evolving US trade policies, and heightened geopolitical tensions keep Asia navigating a complex landscape in 2025. Investors should also keep a close eye on several pivotal events shaping the region.

• Trump’s Return to the White House (January): Expected to pressure global growth, particularly for Asia’s export-driven economies.
• China National People’s Congress (March): Will unveil China’s GDP growth target and policy announcements on economic restructuring and green initiatives.
• Sri Lanka’s 2025 Budget (February): A critical moment for the nation’s fragile economy, outlining the government’s approach to meeting financial targets.
• Australia Elections (H1): A close race between the ruling Labor Party and the Liberal-National Coalition, with cost-of-living pressures and housing prices as key issues.
• Japan’s Upper House Election (July): Crucial for Prime Minister Shigeru Ishiba, with the Liberal Democratic Party (LDP) seeking to maintain its majority.
• Singapore Election (November): A pivotal moment for Prime Minister Lawrence Wong, with potential implications for trade, taxation, and foreign investment policies.

International Economic Developments

Will Trump’s policies affect Asia’s export-driven economies significantly?

Trump’s policies are expected to have a significant impact on Asia’s export-driven economies, particularly those with trade surpluses with the US. The proposed 60% tariffs on Chinese goods could lead to:

• Reduced exports from countries like China, Japan, and South Korea
• Increased costs for businesses and consumers in these countries
• Potential trade wars and retaliatory measures from other countries

Stabilization of China’s Economy through Targeted Stimulus Measures

China is expected to stabilize its economy through targeted stimulus measures, including:

• Continued investment in advanced technologies like AI and renewable energy
• Targeted stimulus packages to boost consumer spending and economic growth
• Potential adjustments to monetary policy to support economic growth

However, the effectiveness of these measures will depend on various factors, including the extent of the stimulus, the impact of global economic trends, and the country’s ability to implement reforms.

The People’s Bank of China’s pause in treasury bond acquisition pushed yields higher. The UN forecasted stagnant global economic growth at 2.8% for 2024 and 2025, with the U.S. and China influencing this outlook. The rise in yields reflects market concerns over tightening financial conditions, while the UN’s projection highlights persistent challenges in addressing inflation, geopolitical tensions, and supply chain disruptions. Analysts suggest that the economic policies of the U.S. and China will play a pivotal role in shaping recovery trajectories, with particular attention on trade relations, monetary strategies, and domestic fiscal initiatives.