The slowing of the Chinese and European economies is expected to continue driving foreign funds to flow into Thailand, where an economic recovery is projected, says Asia Plus Securities (ASPS).
The recovery of Thailand's manufacturing production index, posting 3.36% growth in September, and the current account surplus should attract fund flows to the Thai stock market for the rest of 2022, the brokerage said.
"The European economy shows growing risk of recession as inflation has skyrocketed, driven mainly by rising food and energy prices as a result of European countries' sanctions on goods from Russia," said ASPS executive vice-president Therdsak Thaveeteeratham.
Meanwhile, GDP for the third quarter was weak compared with analysts' expectations.
Europe's third-quarter GDP expanded by only 0.2% from the previous quarter, up slightly from a market forecast of 0.1%, but down from gains of 0.6% and 0.8% the second and first quarters, respectively.
In Asia, China's Purchasing Managers Index (PMI) in the manufacturing sector fell to 49.2 points in October, lower than the market expectation of 50.0 points as well as the 50.1 points tallied the previous month.
The October service PMI was 48.7 points, compared with a market expectation of 50.2 as well as 50.6 a month earlier.
"The decrease was driven mainly by the Chinese government's lockdown measures under the zero-Covid strategy, as well as the slowdown in export demand as the global economy cools," said Mr Therdsak.
"The Thai economy has continued to recover, and this supports fund flows into the Thai stock market."
According to the Bank of Thailand, the nation's current account turned positive with a value of US$600 million in September, from a deficit of $3.5 billion in the previous month, backed by 8.4% year-on-year growth in exports.
The trade surplus stood at $1.9 billion for the month.
ASPS expects Thailand's current account surplus to continue to grow in the last two months of the year because of two main factors. First, exports should maintain growth as more countries open up their economies, while declining crude oil prices should bolster the trade deficit.
Second, lower freight rates and a recovery in tourism should help lower the deficit in the services sector, said the brokerage.
The Tourism Authority of Thailand expects foreign arrivals to reach 10 million this year and 18 million in 2023 after many countries eased travel restrictions, boosting the country's tourism revenue in the coming months.