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 passage of Thailand's new constitution is positive for short-term political stability and economic growth and will pave the way for elections in 2017. However, from a long-term perspective it will likely deepen Thailand's large societal divide and potentially undermine economic growth.

  • Thailand's relatively strong Q216 real GDP growth print supports our view of an acceleration of full-year growth to 3.0% in 2016 and 3.5% in 2017. The tourism sector was a key driver of growth, but faces downside risks from the potential for a flare up in political instability and slowing Chinese growth, but ongoing public infrastructure projects and a recovering manufacturing sector should support growth.

  • We continue to expect the BoT to maintain its benchmark interest rate at 1.50% over the coming quarters even as headline CPI rises. The inflation cycle has likely turned and the bond market is signalling the potential for higher inflation expectations, but CPI is likely to remain at the lower end of the BoT's 1.0%-4.0% target band over the medium term.

  • We continue to see gradual further Thai baht strength amid low inflation and favourable terms of trade dynamics, which continue to support the country's saving rate. However, risks are weighted to the downside given the risks posed by the ongoing slowdown in China and the weakening of the Chinese yuan.

  • The Thai government has ramped up spending this year as part of its ongoing infrastructure investment programme, with capital spending rising 24.0% y-o-y for the January-July period. Given the productive nature of such expenditure, we do not expect to see fiscal sustainability deteriorate notably.

Major Forecast Changes

  • We have made some slight revisions to Thai baht forecast to reflect recent strength, but we continue to see the currency edge slightly stronger versus the US dollar over the coming year thanks to the recent improvement in the terms of trade and the country's record savings rate.

Key Risk

  • A key risk could come from renewed political instability. The military has been successful in quelling protest activity since it assumed power, with the recent constitutional referendum passing will little opposition. However, with King Bhumibol Adulyadej in poor health, his eventual death may spark renewed instability in Thai politics and the business environment.

  • On the economic front, Thailand's tourism boom has been largely driven by rapid growth in mainland Chinese arrivals, which could slow sharply should the Chinese economy undergo a recession.

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 404.4 395.3 397.4 432.4
Consumer price inflation, % y-o-y, eop 0.6 -0.9 1.0 1.5
Exchange rate THB/USD, eop 32.90 36.00 34.00 34.00
Budget balance, % of GDP -2.0 -1.7 -2.4 -1.8
Current account balance, % of GDP 3.8 8.8 11.9 8.5
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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