FETCO points out that digital wallets for vulnerable groups can help turn the economy around in the short term.

FETCO reveals that the investor confidence index has adjusted to the 'hot' level. Investors see supporting factors from economic stimulus measures and the recovery of the Thai economy. The dragging factors are political uncertainty and the recession of the domestic economy. Vayuphak and ThaiESG are expected to drive more than 200 billion baht into the market. It indicates that digital wallets in vulnerable groups can help turn the economy around in the short term. Mr. Kobsak Pootrakool, Chairman of the Federation of Thai Capital Market Organizations (FETCO), revealed the investor confidence index. The survey results in August 2024 found that 'the investor confidence index for the next 3 months is at 132.51, increasing back to the 'hot' level due to the government's economic stimulus measures that support confidence the most, followed by the recovery of the domestic economy and positive signals from the clarity of domestic politics. Meanwhile, the factor that drags down investor confidence the most is the un certainty of the domestic political situation, followed by the recession of the domestic economy and inflation. The most interesting business category is the commerce category, and the least interesting business category is the automotive category. The survey results in August 2024 by investor groups found that the confidence of individual investors increased by 73.6% to 144.26, the securities company account group increased by 28.4% to 144.44, the domestic institutional investor group increased by 32.0% to 120.00, and the foreign investor group increased by 275.0% to 125.00. While in the first half of August 2024, the SET Index was volatile and adjusted down below 1,300 points due to domestic political uncertainty, despite receiving good news from the announcement of Thai GDP in Q2/2024 growing higher than expected, expanding by 2.3%, driven by the tourism sector, private consumption and exports. However, the SET Index in the second half of the month continued to increase after the appointment of the 31st Prime Minister and the government's economic stimulus measures by distributing 10,000 baht in cash to vulnerable groups in the digital wallet project, including the FED's stance on reducing interest rates. The SET Index at the end of August 2024 closed at 1,359.07, an increase of 2.9% from the previous month. The average daily trading volume in August 2024 was 44,404 million baht. Foreign investors sold a net 6,133 million baht. Since the beginning of the year, foreign investors have continued to sell a net 123,692 million baht. International factors to watch include the Fed's monetary policy, which is expected to reduce the policy interest rate at its next meeting, and the tensions in the Middle East, which are likely to escalate. Domestic factors to watch include the results of the formation of a new cabinet, the government's economic policies, which are expected to stimulate investment, including the results of the Vayuphak Fund, which will have 150 billion baht, plus 60 billion baht from the ThaiESG Fund , totaling approximately 200 billion baht, to stimulate the Thai capital market, and the flood situation in the northern part of Thailand, which may affect the slowing economy. Mr. Kobsak added that the Thai economy this year has a chance to expand by 3% +-, but the important issue for the government at this time is the continuity of economic policies. As a new government from the same political party, it will create continuity of policies that can be immediately moved forward, including the Vayuphakdi Fund and the 10,000 baht top-up project via digital wallets. As for the NPL problem that is still at a high level, especially for car and housing loans, it is believed that when the politics are clear, the overall picture will start to improve, but the grassroots economy still has problems. Accelerating the implementation of the digital wallet policy for vulnerable groups will help turn the economy around in the short term. There should be simple, direct, and uncomplicated measures. However, in the next phase , the government must guillotine the law to revive the economy without spending money and has large-scale investment measures in infrastructure that have already been prepared, especially the technological structure, which will help the Thai economy grow in the future. At the same time, commercial banks that have high profits from the strength of large customers should work closely with the government to use the profits to help SME customers and vulnerable groups to help drive the economy forward. For Thailand's policy interest rate, the most suitable period for a cut is the beginning of the year, as this was the period when inflation was negative and the economy grew at its lowest. However, the reason why the MPC did not cut the interest rate may be because the MPC believes that the Thai economy is starting to recover, and an interest rate of 2.50% per year is appropriate. Personally, I agree that the policy interest rate of 2.0-2.50% per year at this time is also appropriate, as the Thai economy currently has economic engines that are continuously recovering, including tourism and exports. Therefore, the need to cut the interest rate may not be much. Source: Thai News Agency