The past election cycles have generally been positive for the Thai stock market, boosted by expectations of economic stimulus measures to support the economy. The analysts note that over the past five elections since 2001, the Stock Exchange of Thailand (SET) index rose by an average of 3.4% three months before the elections, continuing to rise by an average of 5.3% one month after the elections.
Maybank Securities analysts Lee Ju Ye and Chua Hak Bin have maintained their GDP growth forecast for Thailand at 4% this year, expecting the general election on May 14 to cause minimal disruption to the country’s tourism-led recovery. This is unless there is significant social unrest over a contentious election, as seen in 2014, the analysts add. During the 2013 and 2014 political crises, Thailand’s GDP growth slowed to 0.2% (from 4Q2013 to 2QFY2014) from 3.6% in the first nine months of 2013.
“Our base case is for a political transition which may delay budget approvals and government spending but has minimal impact on the return of foreign tourists,” the analysts add.
