Retail, tourism and construction stocks are likely to benefit from cabinet approval this week of 17 billion baht in spending to stimulate the economy, says Asia Plus Securities (ASPS).
While the global economy is decelerating, especially the US and European countries, Thailand's economy continues to recover, said ASPS. To stimulate growth, the Thai government is preparing to introduce various measures with a budget of 17 billion baht for the remainder of 2022.
According to the National Economic and Social Development Board's latest forecast, the economy is projected to expand by 3% this year. GDP growth is expected to reach 3.6% in the second half this year, noticeably stronger than in the first six months.
The imminent spending is aimed at reducing the cost of living, stimulating tourism, and flood relief measures that should help the construction sector.
For example, liquefied petroleum gas price discounts are to be offered via welfare cards to ease the cost of living for low-income earners. Stocks that should benefit from this measure are in the trading and food sectors, such as Thai Union Group (TU), Carabao Group (CBG) and CP All, a unit of Charoen Pokphand Group.
Tourism stimulus measures in the South aim to reduce traffic gridlock and improve transport by building a bridge crossing Songkhla Lake and a bridge to Koh Lanta. These benefit infrastructure stocks such as CH Karnchang (CK) and CK Power (CKP), said the brokerage.
The government is going to revoke the requirement for medical certificates and work permits for long-term residency (LTR) visas to attract high-spending foreigners. This benefits transport shares, led by Airports of Thailand (AOT), said ASPS.
The flood relief measures such as tax deductions, special loans and cash handouts of about 3,000 baht per household should help those affected, with the damage being surveyed now. This assistance should boost flood repair plays like Home Product Center (HMPRO) and Siam Global House (GLOBAL), according to the brokerage.
Domestic spending stimulus and pumps for purchasing power are in the pipeline, such as "Khon La Khrueng" (Half-Half), "We Travel Together" and the "Shop Dee Mee Kuen" payback scheme. These benefit commerce and food plays led by CBG, Central Pattana (CPN), Central Retail Corporation (CRC) and Home Product Centre (HMPRO), said ASPS.
"Thanks to the stimulus measures and the country's reopening, the economy is expected to recover by the year-end. In 2023, the government is projected to switch focus from relief measures to investment stimulus to support economic recovery," ASPS said in its report.
