Regarding
the 2020 US presidential election held on November 3, 2020, KResearch views
that if Joe Biden becomes the new President, the US economy may grow at least
3.0% in 2021, which would be higher than the projected growth of less than 2.0%
in the case where Donald Trump secures his reelection due to his administrative
constraints. However, the outcome remains to be seen until
the official announcement of the US presidential election results prior January
20, 2021.
If the endorsement of the US
presidential election results is delayed, it is expected that the money and
capital markets will be affected over the short term. The US dollar, being a
safe haven currency, may strengthen while risky assets will likely experience
increased sell-off. Over the medium- to long-term, in the case that Biden wins
the election, the US Dollar may soften in line with the signals of the Federal
Reserve (Fed) for more monetary easing, and it will likely be pressured further
as a result of the US fiscal deficit. On the contrary, if Donald Trump wins the
election, it is expected that money and capital markets will fluctuate in the
short term, while the trend of the US fiscal deficit may not be as severe as in
the case that Joe Biden wins, and the US government bond yield may not
accelerate. However, the risk factors from the frequently changing stances of President
Donald Trump may bolster the US dollar at some points, despite the US dollar being
pressured by the Fed’s signals of easing monetary policy in the long term.
Regarding the direct impact of the US election on
Thailand’s real economic sector during 2021, KResearch sees that if Biden becomes
the new US President, it is expected that the US economy will improve, and this
may help bolster the exporting of Thailand’s key consumer products to the US.
As a result, overall Thai shipments to the US may grow within a range of 10-12%
to approximately USD36.7-37.3 billion
during 2021, bettering the 6.4% growth projected for 2020. However, if
President Trump is re-elected, it is expected that Thai exports to the US may
grow at less than 5% to roughly USD35.0 billion in 2021. Most Thai shipments to
the US will likely grow at a meager pace, including luxury products in
particular. If either Biden or President Trump wins the election, Thailand may
indirectly be affected by steady capital outflows from China via aggressive US
foreign policy towards Beijing. Nevertheless, close attention must be paid to
the US-China trade war because it can escalate if President Trump is re-elected,
but it may not elevate in the short term in the case of Joe Biden’s election.
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