ASEAN KEY DESTINATIONS
Impact of US currency move
The concern is acute in export-dependent Thailand, where the baht continues to gain in light of the US Federal Reserve's new round of quantitative easing. The so-called QE2 program calls for the Fed to purchase $600 billion worth of US treasuries over the next seven months to inject liquidity into the sluggish US economy.
Many of those dollars are expected to flow abroad in search of higher returns. Dollar-denominated prices of commodities including oil and metals are also on the rise.
Thai industrialists say policymakers have not yet come up with aggressive enough measures to curb capital inflows. Exporters foresee a tough year ahead with some orders drying up as the baht gets stronger and their products become less competitive.
There are also concerns about a real estate and stock market bubble if regulators don't act to prevent overheating.
But speculative foreign capital inflows, whether a result of QE or not, are not going into residential property in Thailand, says Patima Jeerapaet, managing director of the property consultant Colliers International Thailand.
He says that capital inflows would go into industrial estates first, especially in automobiles and garments, then to offices, hospitality and finally the residential market. In any case, he says, the property market will get a much bigger boost from regional integration under the Asean Economic Community (AEC) in 2015.
"Many hotel chains based in European countries are expanding into Thailand as they see an opportunity for tourism growth in the next few years, being stimulated by the AEC."
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