Latest news with #AmonthepChawla
Bangkok Post
4 days ago
- Business
- Bangkok Post
Real estate price war on the horizon
The slowdown in the real estate sector is expected to trigger a price war in the property market and dampen the purchasing power of upper-income homebuyers. Amonthep Chawla, chief economist at CIMB Thai Bank (CIMBT), warned the housing market may encounter a price war in the near future, similar to what occurred in the automotive sector last year, based on the sector's ongoing slowdown. Competition could emerge for both new and existing residential projects. Sales of second-hand homes in both low-rise and high-rise segments have been declining for some time, leading to price reductions and intensified competition, he said. "We are concerned the property sector may experience a price war similar to what happened in the auto market last year, which could prolong its recovery. However, the impact on the property sector could be more severe, given the higher value of the housing market," said Mr Amonthep. While slower loan growth has partially helped to improve Thailand's household debt-to-GDP ratio, he said it also reduced liquidity in the economy and weighed on economic growth. According to a Bank of Thailand report issued on June 30, total household debt tallied 16.35 trillion baht in the first quarter of 2025, equivalent to 87.4% of GDP, down from 16.42 trillion baht or 88.4% of GDP in the previous quarter. Mr Amonthep said the country's household debt-to-GDP ratio is expected to ease further this year and next, largely due to loan contraction and softer economic growth. Despite ongoing policy rate cuts under the central bank's monetary easing, loan growth in the banking sector has yet to pick up due to the slowing economy and the regulator's responsible lending guidelines, he said. CIMBT expects the Thai economy to slow further in the second half of this year amid headwinds from both domestic and external factors. The economy is expected to stagnate in the final quarter of 2025 through to the first quarter of 2026, before recovering in the second half of next year. Data from the Real Estate Information Center (REIC) shows the price index for new houses in Greater Bangkok tallied 132.4 in the second quarter of 2025, up 0.6% year-on-year and 0.4% quarter-on-quarter. Although the index rose, the growth rate has slowed, largely due to an increase in unsold housing units, prompting developers to accelerate inventory clearance. Rather than cutting prices outright, most developers have made only modest adjustments in line with weaker purchasing power. Many large developers are instead turning to promotional strategies, such as complimentary gifts and special campaigns, to ease the financial burden on homebuyers, according to REIC data.
Bangkok Post
6 days ago
- Business
- Bangkok Post
Economists split over BoT rate decision
Following the reduction of the US reciprocal tariff rate on Thai exports, economists are divided over the Bank of Thailand's policy rate decision at the Monetary Policy Committee (MPC) meeting scheduled for Wednesday. Amonthep Chawla, chief economist at CIMB Thai Bank, said he expects a rate cut of 25 basis points (bps) to 1.50% at the meeting. He said the economic signals are weak, inflation is below the central bank's target range and loans are contracting -- all supporting the case for a policy rate cut. Although the US reduced its tariff on Thai exports to 19% from 36%, uncertainties persist, particularly regarding transshipment tariffs. "In the face of persistent challenges, lowering the policy rate is a reasonable step to support the economy," said Mr Amonthep, warning that Thailand could face stagnation from the fourth quarter of this year through the first quarter of 2026. Economic stagnation is a prolonged period of slow or no economic growth, often measured by low GDP growth and typically accompanied by high unemployment. This stage is characterised by stagnant wages, weak consumer demand, declining productivity and limited innovation. SCB Economic Intelligence Center (EIC), the research unit of Siam Commercial Bank, also forecasts a cut of 25 bps at the meeting, followed by another reduction in December, putting the policy rate at 1.25% by year-end. Thitima Chucherd, head of economic and financial market research at EIC, said despite the tariff reduction, the Thai economy will continue to face uncertainties and challenges. However, the 19% tariff rate is expected to support exports. EIC plans to revise its export forecast for this year from a contraction to marginal growth. The unit also intends to raise its GDP growth projections for 2025 and 2026 to roughly 2%, up from the current estimates of 1.5% and 1.4%, respectively. Kasikorn Research Center (K-Research), however, expects the central bank to keep the rate unchanged at 1.75% on Wednesday, noting the regulator has already lowered the rate by 50 bps since the start of the year. Nattaporn Triratanasirikul, deputy managing director at K-Research, said Thai GDP is likely to grow by nearly 3% year-on-year in the second quarter. The US tariff rate reduction should help to sustain export momentum and economic growth, with the research unit upgrading its 2025 GDP growth forecast from 1.4% to 1.5%, while its export projection was revised from a 7.4% contraction to 3.4% growth. Still, headwinds remain for the second half of the year, including ongoing uncertainty over US tariffs, especially transshipment penalties, a possible decline in foreign tourist arrivals and tensions between Thailand and Cambodia, according to K-Research. These challenges suggest the economy will require more support in the final quarter, she said. "We expect the central bank to cut its policy rate one or two more times in October and December, bringing it down to either 1.5% or 1.25% by year-end," Ms Nattaporn said.
Bangkok Post
29-06-2025
- Business
- Bangkok Post
Analysts: War threatens Thai economy
Amonthep Chawla, chief economist at CIMB Thai Bank (CIMBT), said even though tensions have eased, the ongoing conflicts in the Middle East remain a threat to the Thai economy, in addition to US President Donald Trump's tariffs and the border dispute with Cambodia. "The risk premium remains high and it is highly unlikely global oil prices will drop significantly to below US$60 a barrel," he said. "The market should take a wait and see stance on how the situation develops." Nattaporn Triratanasirikul, deputy managing director of Kasikorn Research Center (K-Research), shared a similar view that the Iran-Israel conflict would not end quickly. The think tank projects global oil prices hovering in a range of $80-90 per barrel in the second half of 2025, at times shooting up to $100. "This fluctuation could possibly lift Thai inflation by 0.3% in the latter half of the year," noted K-Research. Suwat Sinsadok, managing director of Globlex Securities, said the US joining Israel's war with Iran is clearly driven by Trump's fear that rising oil prices could make US inflation soar. "The US has pumped more shale oil to serve domestic demand, but this amount remains inadequate. As a consequence, the US needs to import oil and rising oil prices will make its inflation rise," he said. In Mr Suwat's view, Iran clearly does not want the fighting to last long, but it also wants to hurt Israel as much as possible. "Iran is confident it has an edge and high capacity in fighting with Israel, so it keeps attacking its infrastructure such as ports," he said. "I believe Iran will continue to damage Israel to a certain level before it agrees to enter peace talks brokered by the US." Pichai Lertsupongkit, chief commercial officer at InnovestX Securities, said the sharp uptick of global oil prices pushed the price of listed companies to surge substantially, and is likely to affect export-oriented companies on the Stock Exchange of Thailand (SET). The brokerage is likely to downgrade the SET index target for 2025 if the Middle East conflict pushes the oil price to $90 per barrel, he said. Iran's Fars News Agency said Trump's ceasefire announcement was false and intended to divert public attention from an attack on a US base in Qatar. Polymarket, a decentralised prediction market platform that allows users to bet on the outcome of real-world events, sees only a 17% probability Iran will close the Strait of Hormuz, down from a 60% peak. Notably, 38% of oil flowing through the strait goes to China, which is Iran's ally, while only 3% goes to the US.
