Bank of Thailand Governor Watanagase Gives Keynote Address at Inaugural Citigold & IHT Economic Forum
Bangkok – Citigold Thailand, in partnership with the International Herald Tribune (IHT), held its first Economic Forum event.
The Economic Forum 2007, which aimed to provide Citibank customers and local investors with global financial awareness, featured esteemed speakers like Dr. Tarisa Watanagase, Governor of the Bank of Thailand (BOT), Leonard Apcar, IHT’s Deputy Managing Editor and Chief Editor for the Asia Pacific region and David MacKenzie, Schroders’ Product Manager for Asia ex-Japan Equities.
The Economic Forum 2007 was an extremely popular event and attracted around 500 Citibank and IHT customers (over 350 were Citigold customers) which included leaders of the Thai and expat business communities, investors, and equity players. Twenty-five print media and television journalists were also in attendance.
Under the theme “The Road Ahead: Thailand, Baht and Global Outlook,” the distinguished panelists warned that the possible economic slowdown in the US could have sweeping consequences for Asian markets, including China’s surging economy.
Dr. Tarisa kicked off the event by discussing Thailand’s economic outlook and challenges amid the volatile financial environment.
Along with other countries around the world, Thailand is nervously watching the U.S. economy, the BoT governor said. A slowdown in domestic consumption prompted the U.S. Federal Reserve to slash the federal funds rate this week.
“Recent developments in the U.S. economy and sub-prime credit markets may indeed be an early wake-up call for policymakers and market players worldwide,” said Dr. Tarisa. “U.S. economic growth has spurred global growth, but now the world finances the U.S.’s growing current account deficits. There is no consensus on how this global imbalance will unwind.”
Dr. Tarisa said the BOT would wait to see how the U.S. economy responds to the Fed’s large rate cut of 50 basis points, but noted that Thailand would surely feel an impact.
Leonard Apcar, an expert on both the U.S. and China, focused his remarks on how the large rate cut would affect Thailand and the rest of Asia.
David MacKenzie, an expert on Asian equities, said investments in China have yielded the best results this year, even doubling investment capital. But rapid domestic changes and external factors may yet spell good news for Thailand and the region.
“Based on China’s rapid inflation, there is the potential that manufacturing jobs may flow back into Thailand, and quickly,” he said. “Thailand has a strong workforce.”
Looking solely at Thailand, MacKenzie said the election would boost the economy, but more measures will be required before investors become fully confident.
“An elected government is important, but strong policies and realistic implementation are needed for the Thai economy to recover,” he said. “There will be a short-term surge after the general election, but long-term indicators will begin to appear at the end of 2008.”
However, even if Thailand installs an efficient elected government and effective and practical financial policies, its relatively small economy can easily be affected by global factors like an economic slowdown in the U.S., MacKenzie said.
During a panel discussion near the end of the forum, both Apcar and MacKenzie agreed that the U.S. economic downturn was already spilling over into Thailand.
Although the road ahead looks strewn with obstacles, MacKenzie concluded that the economies of China, Europe and India continue to perform well. The new markets give Asian companies plenty of new growth opportunities.
“Asia is the preferred market in the world,” he said. “In the long term, there is real potential as companies here have good management, solid balance sheets and are under-borrowing now.”
“Asian and Thai companies are very healthy,” MacKenzie added.
The inaugural Economic Forum is the first of a series of annual Economic Forums in which Citigold Thailand will bring distinguished speakers and prominent experts to provide awareness and updates on the latest financial and economic issues.
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