Commerce-Retail Stocks to Gain from Thailand Raising Public Debt Ceiling

Thailand set to increase the public debt ceiling to 70% from 60%. This enables the government to borrow additional funds for fiscal policies in 4Q21. Analyst forecast a total inflow of more than 2 trillion baht via stimulus measures such as Rao Tiew Duay Kan (We Travel Together), Khon La Kreung (Let’s Go Halves), and Shop Dee Mee Kuen (Shop and Payback). These measures would benefit CPALL, BJC, CRC, HMPRO, DOHOME, COM7, SPVI, and CPN.

Finance Minister Arkhom Termpittayapaisith said that the State Monetary and Fiscal Policy Committee that is led by Prime Minister Prayut Chan-o-cha on September 20, 2021, has a resolution to raise the ceiling of public debt-to-gross domestic product (GDP) ratio from 60 to 70%. 

This will enable the government to increase borrowing and spending to help support the economic recovery from the COVID-19 pandemic.

Asia Plus Securities (ASPS) stated that Thailand’s public debt has increased to 55.59% of GDP, approaching the ceiling of 60% of GDP, leaving Thailand with limited room for future economic stimulus.

Since the pandemic began in early 2020, the government has implemented a series of economic stimulus measures, including the cash relief package Rao Mai Ting Kan (Leave No One Behind) and economic recovery measures such as Rao Tiew Duay Kan (We Travel Together), Rao Chana (We Win), Rao Rak Kan (We Love Each Other), supplemental welfare card allowance, Khon La Kreung (Let’s Go Halves), and Shop Dee Mee Kuen (Shop and Payback). While these measures help stabilize Thailand’s economy, they also result in a greater financial burden.

ASPS believes that raising the debt ceiling will provide the government with additional room to implement more economic stimulus measures, particularly in 4Q21. Existing measures, such as Rao Tiew Duay Kan, Kon La Krueng, and Shop Dee Mee Kuen, are expected to be re-launched, bringing the positive sentiment to commerce plays such as CP All Public Company Limited (CPALL), Berli Jucker Public Company Limited (BJC), Central Retail Corporation (CRC), Home Product Center (HMPRO), Dohome Public Company Limited (DOHOME), COM7 Public Company Limited (COM7), S P V I Public Company Limited (SPVI), and department store plays; Central Pattana (CPN).