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 military junta has been successful in returning Thailand to political stability following the 2014 coup, but we are not yet willing to upgrade the country's low Political Risk Index score as fundamental divisions between the 'red shirts' and the 'yellow shirts' remain, and the impending royal succession has the potential to trigger renewed unrest.

  • Thailand's real GDP growth of 2.8% y-o-y in Q415 reflects the positive impact of the government's renewed infrastructure drive and the negative effects of weakening external demand. With the construction sector likely to continue to benefit from a number of major project commencements, and low oil prices having a positive impact on the country's terms of trade, we forecast real GDP growth to pick up slightly to 3.0% in 2016, from 2.8% in 2015.

  • We hold a mildly bullish view on the Thai baht as we believe that the terms of trade gains due to falling raw material input prices will continue to support the country's current account, while there is scope for portfolio flows to return following a lengthy period of outflows. Falling external demand from China, and yuan weakness, together with the potential for a renewed flare-up in political risk, are main downside risks facing the baht.

  • Thailand's current account surplus has surged to the highest level since the Asian Financial Crisis despite relatively modest baht depreciation and continued strong non-oil imports. The concomitant huge outflows in the portfolio account hit record level, but could return over the coming quarters should the country avoid an economic and/or political crisis.

  • While the military government will continue to increase spending to sustain Thailand's economic recovery, positive steps taken to rein in wasteful spending will keep expenditure growth in check. Coupled with the prospects for higher fiscal revenue on the back of a gradually improving economy and the windfall receipts from the recent spectrum auctions, Thailand should have the fiscal resources to finance its eight-year master infrastructure plan.

Major Forecast Changes

  • We have revised down our real GDP forecast to 3.0% for 2016, compared with our previous forecast of 3.3% and the 2015 figure of 2.8%. That said, an acceleration in growth from 2015 will come in spite of continued external headwinds, most notably from the weakness in Chinese growth.

  • We forecast the Thai baht to average THB35.40/USD in 2016, marking an upward revision from THB36.50/USD previously.

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 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 404.3 395.3 395.2 423.0
Consumer price inflation, % y-o-y, eop 0.6 -0.9 1.0 2.5
Exchange rate THB/USD, eop 32.91 36.02 35.10 34.92
Budget balance, % of GDP -2.0 -2.1 -2.2 -1.5
Current account balance, % of GDP 3.8 8.8 8.6 8.5
Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks
5
Chapter 1: Economic Outlook
7
SWOT Analysis
7
BMI Economic Risk Index
7
Economic Growth Outlook
8
GDP Report A Mixed Picture
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
Monetary Policy
10
BoT To Remain On Hold But Downside Risks Growing
10
Monetary Policy Framework
11
External Trade And Investment Outlook
12
Terms Of Trade Improvement A Major Boost To External Picture
12
Outlook On External Position
13
TABLE: CAPITAL & FINANCIAL ACCOUNT BALANCE
13
TABLE: MAIN EXPORT AND IMPORT PARTNERS
14
TABLE: MAIN EXPORTS AND IMPORTS
14
Fiscal Policy And Public Debt Outlook
15
Manageable Fiscal Profile Supportive Of Growth
15
Structural Fiscal Position
16
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES
16
Currency Forecast
17
THB: Terms Of Trade Gain Supports Stronger Baht
17
TABLE: CURRENCY FORECAST
17
Chapter 2: 10-Year Forecast
19
The Thai Economy To 2025
19
Political Uncertainty The Main Growth Obstacle
19
TABLE: LONG-TERM MACROECONOMIC FORECASTS
19
Chapter 3: Political Outlook
23
SWOT Analysis
23
BMI Political Risk Index
23
Domestic Politics
24
Stability Returns, But Fundamental Risks Remain
24
TABLE: POLITICAL OVERVIEW
24
Long-Term Political Outlook
25
Greater Political Turbulence Ahead, As Royal Succession Looms
25
Chapter 4: Operational Risk
29
SWOT Analysis
29
Operational Risk Index
29
Operational Risk
30
TABLE: OPERATIONAL RISK SCORES
30
Trade Procedures And Governance
31
TABLE: ASIA - TRADE PROCEDURES AND GOVERNANCE RISK
31
TABLE: IMPORT & EXPORT DOCUMENTS
32
TABLE: TRADE PROCEDURES BREAKDOWN
32
Vulnerability To Crime
33
Chapter 5: BMI Global Macro Outlook
37
Global Macro Outlook
37
Tail Risks Mounting Amid Sub-Par Growth
37
TABLE: GLOBAL ASSUMPTIONS
37
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
38
TABLE: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, 2015 AND 2016 (%)
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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