Thailand Country Risk Report

Providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

Why you should buy this report

  • Understand and measure the political, business environment and operational risks to your company
  • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
  • Get the long-term political outlook and explore possible scenarios for change
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Thailand Country Risk Report
Product Price
$1,195.00

Core Views

  • The ongoing severe drought poses another obstacle to the military government's aim of pushing through a revised constitution at the August 7 referendum. Growing discontent among rural Thais could also aggravate divisions within the royal-nationalist faction, further undermining political stability.

  • Thailand's strong Q116 growth figures suggest the economy is shrugging off the impact of the ongoing drought, supporting our view for 3.0% full-year growth. While still below potential, this would mark the fastest annual expansion since 2012, supported by rising tourism revenues and large scale public infrastructure investment.

  • The BoT held interest rates at 1.50% on May 11 and we believe the easing cycle is over. Rate hikes are unlikely to be forthcoming this year or next, however, with little sign of medium-term inflationary pressures amid weakening money and credit growth.

  • The Thai government's reforms to the country's tax system should help boost foreign investment at the margin, while a focus on asset and indirect taxes will broaden the tax base. The key to unlocking fiscal reforms, however, will be improving the efficiency of state-owned enterprises, which the government appears to be making progress on.

  • The improvement in terms of trade has led to a surge in Thailand's external surplus, which is currently in double-digit territory and likely to remain in high single digits over the coming years. However, the large surplus partly also reflects the lack of appetite on behalf of foreign investors owing to lingering political risks, and is therefore by no means an unequivocal positive.

Major Forecast Changes

  • We have made some slight revisions to our monetary policy forecasts for the coming years. We continue to expect the Bank of Thailand to remain on hold at 1.50% until 2018, but expect the hiking cycle to be more aggressive once it begins.

Key Risk

  • A key risk could come from renewed political instability. The military has been successful in quelling protest activity since it assumed power, but with the referendum approaching there is a risk of Red Shirt protests. Additional, with King Bhumibol Adulyadej in poor health, his death may spark renewed instability in Thai politics and the business environment.

Macroeconomic Forecasts (Thailand 2014-2017)
Indicator 2014 2015e 2016f 2017f
National Sources/BMI
Real GDP growth, % y-o-y 0.8 2.8 3.0 3.5
Nominal GDP, USDbn 404.4 395.3 395.2 418.9
Consumer price inflation, % y-o-y, eop 0.6 -0.9 1.0 1.5
Exchange rate THB/USD, eop 32.90 36.00 35.10 34.90
Budget balance, % of GDP -2.0 -2.1 -2.2 -1.6
Current account balance, % of GDP 3.8 8.8 7.7 7.1
Executive Summary
5
Core Views
5
Key Risks
5
Chapter 1: Economic Outlook
7
SWOT Analysis
7
BMI Economic Risk Index
7
Economic Growth Outlook
8
Real Estate Correction, External Conditions Warrant GDP Downgrade
8
GDP By Expenditure Outlook
9
TABLE: GDP GROWTH FORECASTS
9
TABLE: PRIVATE CONSUMPTION FORECASTS
9
TABLE: GOVERNMENT CONSUMPTION FORECASTS
10
TABLE: FIXED INVESTMENT FORECASTS
10
TABLE: NET EXPORTS FORECASTS
10
Fiscal Policy And Public Debt Outlook
10
Pragmatic Budget To Provide Little In The Way Of Stimulus
10
Structural Fiscal Position
11
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
11
External Trade And Investment Outlook
12
Trade Woes To Continue, But Overall Position Remains Stable
12
Outlook On External Position
13
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
13
TABLE: TOP 5 GOOD EXPORTS
14
TABLE: TOP 5 GOODS IMPORTS
14
Monetary Policy
15
HKMA To Stay The Course As Property Prices Fall
15
Monetary Policy Framework
16
TABLE: MONETARY POLICY FORECASTS
16
Chapter 2: 10-Year Forecast
19
The Hong Kong Economy To 2025
19
Mainland Exposure A Double-Edged Sword
19
TABLE: LONG-TERM MACROECONOMIC FORECASTS
19
Chapter 3: Political Outlook
21
SWOT Analysis
21
BMI Political Risk Index
21
Domestic Politics
22
Pro-Beijing Camp To Lose Traction, But Retain Majority
22
TABLE: POLITICAL OVERVIEW
22
Long-Term Political Outlook
23
Benign Outlook Despite Rising Social Difficulties
23
Chapter 4: Operational Risk
27
SWOT Analysis
27
Operational Risk Index
27
Operational Risk
28
TABLE: OPERATIONAL RISK
28
Market Size And Utilities
29
TABLE: ASIA - MARKET SIZE AND UTILITIES RISK
30
Labour Costs
32
TABLE: LABOUR REGULATIONS GOVERNING FLEXIBILITY OF WORKFORCE
33
Chapter 5: BMI Global Macro Outlook
37
Global Macro Outlook
37
Brexit Risk Casts A Long Shadow
37
TABLE: GLOBAL ASSUMPTIONS
37
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
38
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
39
TABLE: MACROECONOMIC DATA & FORECASTS
41

Assess your risk exposure in Thailand with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in Thailand with confidence.

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