Dr. Pipat Leuangnaruemitchai, Chief Economist at Kiatnakin Phatra Securities Public Company Limited shared his views on the global economy at the KKP Year Ahead 2025: Opportunities Unbound event on January 14, stating that while the U.S. economy shows signs of slowing down, it continues to grow above its potential and is likely to perform stronger than other regions. The U.S. policy interest rate may decrease, but not significantly compared to previous forecasts, due to the still robust economic outlook and high inflationary pressures. A key point to watch is the policies of Donald Trump’s administration, which are expected to have considerable impacts on the U.S. and other countries.

“Donald Trump will use tax policies as a bargaining tool with other countries on various issues such as security, unfair trade, opening foreign markets to U.S. goods, or cooperation on immigration. These policies may benefit the U.S. but create turmoil for other countries, especially in the first half of the year, due to the sequence of policies Trump will implement first and the current high asset values,” Dr. Pipat stated.

For Thailand this year, tourism, the service sector, and fiscal policy remain key engines, but the economy is expected to slow down compared to last year due to competitiveness issues and trends in bank lending. Additionally, the trade policies of the Trump administration pose significant risks that Thailand must prepare for in negotiations. It is anticipated that Thailand's policy interest rate may be reduced three times this year, as the current rate is significantly higher than the inflation rate, and financial conditions are tight.

Mr. Taweesak Phaepallop, Head of Economic and Investment Analysis at Kiatnakin Phatra Securities Public Company Limited, provided recommendations on suitable investment strategies to adapt to changes in the global economy, stating that risky assets will not yield the same outstanding returns in a high-interest environment, having passed the peak for stocks. It is advisable to focus on a Prudent Asset Allocation strategy, diversifying investments across various assets based on risk levels to help navigate volatility.

Regarding stocks, when forecasting returns over the next five years, global stocks appear more attractive than Thai stocks, thus recommending a reduction in holdings of Thai stocks. Interesting stock markets include Japan, which is likely to sustainably emerge from deflation and has corporate governance reforms, as well as the financial sector, which benefits from fees and regulatory relaxations, employing a Buy on Dip investment strategy and diversifying into S&P 500 Equal Weighted stocks.

Additionally, U.S. government bonds with maturities of 3-5 years are another appealing option, offering high yields and helping to reduce portfolio risk in times when the market becomes concerned about the economy.

High-quality Thai bonds rated A- and above remain an interesting choice for investors in a scenario where interest rates are likely to decrease further, but for bonds rated BBB+ and below, investors need to choose investments carefully (Selective).

The KKP Year Ahead seminar is an event that gathers in-depth information about the global economy and investment directions, providing insights into quality assets and investment diversification to adjust investment strategies in line with changes in the global economy, enabling investor clients to tackle challenges and seize opportunities in the financial market confidently. For more updates on KKP's economic and investment perspectives, follow us on Facebook: Kiatnakin Phatra and EDGE Invest.