Dec. 17--Aberdeen Asset Management projects brighter prospects for Thailand's economy, with GDP growth of 3-3.5% thanks to an export revival spurred by US and European growth.
Pongtharin Sapayanon, head of fixed income at Aberdeen, said the growth projection does not include investment from the government's 2-trillion-baht infrastructure scheme.
The asset management firm expects the infrastructure investment will provide an adrenaline kick to the Thai economy in 2015 rather than next year because no one can predict when the protests will stop and whether the election will take place as scheduled, likely delaying the project.
"We anticipate net export growth of 7% next year on the recovery of purchasing power in the US, Europe and Japan. This will compensate for softening domestic consumption and investment, which supported economic growth the past few years," said Mr Pongtharin.
He said the world's largest economy is expected to rise by 3% in the fourth quarter of 2014, but for the whole year US growth will range from 1% to 2%.
Mr Pongtharin said an improving GDP could lead to a policy interest rate rise of 25 basis points to 2.5% in the second half next year after a recent rate cut meant to support the country's recovery.
The baht is expected to depreciate against the US dollar to around 32.5-33 baht as a result of the stronger greenback.
Adithep Vanabriksha, Aberdeen's chief investment officer, said the company expected listed companies' earnings growth to be conservative at 10%.
"We believe the Thai share market is at a fair value now, with the forward price-to-earnings ratio at 13.3 times," said Mr Adithep.
Aberdeen recommends investors buy sectors that benefit from foreign direct investment and tourism, which contribute 3-5% and 10% to Thailand's GDP, respectively.
As of November, Aberdeen Asset Management managed total assets of 37.67 billion baht, comprising 32.8 billion in mutual funds, 4.3 billion in provident funds and 575 million in private funds.