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The World Bank cut Thailand’s economic growth forecast for 2015 on Monday to 2.5%, from the April 15 forecast of 3.5% growth. Things could get worse in the next two years as the bank also cut Thailand's GDP for 2016 and 2017 by 2 and 1.6 percentage points to 2.0% and 2.4%, respectively. There is more bad news that Thailand has the lowest GDP growth forecast among Asean countries.
At the end of last month, the Asian Development Bank (ADB) cut its 2015 Thailand GDP growth forecast to 2.7% from 3%, citing weak domestic demand and the economic slowdown in China and other Asian economies. The bank said that economic growth in Thailand could be bumped up by a couple of tenths-of-a-percentage point if the stimulus measures approved by the Thai government were included. The ADB also trimmed Thai economic growth in 2016 to 3.8% from 4.1%.
Luckily, not many people trade stocks on the World Bank or ADB data. Technically, the index is still moving in a shallow symmetrical triangle chart pattern but downside risks remain as it trades below the 1,370 resistance level. The index could break out and close above 1,401 if the USD/THB exchange rate stabilizes around 36.50 baht per dollar and the U.S. Federal Reserve stays on the sidelines.
Key technical resistances are 1,375.99 and the 50-day SMA (green line), which runs parallel to the upper trendline resistance of the descending wedge. Interesting what computerized trading can do, isn’t it?
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