Thailand Country Risk Report

Published 23 June 2015 | Quarterly

  • 54 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
Thailand Country Risk Report

Core Views

  • Thailand is rapidly regressing from democracy. With the military junta continuing to consolidate power, there is a growing risk that Thailand could remain a military-governed country for longer than expected, which would undermine its long-term economic growth prospects. A return to democracy is therefore far from assured.

  • While Thailand's military government has sought to engineer an economic recovery, growing external challenges and the potential for renewed political turmoil will keep GDP growth grounded. As such, we have downgraded our 2015 real GDP growth forecast to 3.2% from 3.5% previously. The slow economic recovery has also led us to revise our forecast for the Thai baht to end 2015 at THB36.50/USD and average THB34.50/USD in 2015.

  • The latest round of fiscal stimulus that was introduced on September 1 will further boost public spending and provide a short-term reprieve for the Thai economy. As such, we now forecast a wider budget deficit of 2.1% of GDP in 2015, versus our earlier estimate of 1.7%. That said, positive structural developments on the expenditure front, such as the end of the rice subsidy scheme, should still keep Thailand's fiscal position on a sustainable path over the coming years.

  • Growing export headwinds will continue to undermine Thailand's ongoing economic recovery, which will likely spur the Bank of Thailand (BoT) to cut its benchmark interest rate by another 25 basis points to 1.25% by end-2015. The deflationary environment also provides the scope for further monetary easing.

  • The Thai baht is set for continued weakness owing to the poor technical picture and growing economic headwinds. As such, we forecast the Thai baht to end 2015 at THB36.50/USD before weakening further to THB36.94/USD by 2016.

  • Major Forecast Changes

  • We downgraded our 2015 real GDP growth forecast from 3.5% to 3.2%.

  • We downgraded Thailand's fiscal deficit as a share of GDP from 1.7% to 2.1% in 2015.

  • We forecast the Thai baht to...

Executive Summary
Core Views
Major Forecast Changes
Key Risks To Outlook
Chapter 1: Political Outlook
SWOT Analysis
BMI Political Risk Index
Domestic Politics
Impeachment A Major Step Backwards For Politics
TABLE: Political Overview
Long-Term Political Outlook
Political Woes To Persist
Chapter 2: Economic Outlook
SWOT Analysis
BMI Economic Risk Index
Economic Activity
Recovery On Track, But Numerous Headwinds Ahead
TABLE: Economic Acti vity
Fiscal Policy
Fiscal Improvement On The Cards
TABLE: Fiscal Policy
Monetary Policy
Accommodative Rates Through 2015
Exchange Rate Policy
THB: No Major Weakness In Sight
TABLE: Current Account
Chapter 3: 10-Year Forecast
The Thai Economy To 2024
Politics A Headwind, But Won't Prevent Solid Growth
TABLE: Long-Term Mac roec onomic Forecasts
Chapter 4: Operational Risk
SWOT Analysis
Operational Risk Index
Operational Risk
TABLE: Operational Risk
Availability Of Labour
TABLE: Asia - Availability of Lab our
TABLE: Lab our Force Empl oyme nt By Sect or ('000)
Crime Risk
TABLE: Asia - Crime
TABLE: Crime Statistics
Chapter 5: Key Sectors
TABLE: Aut os Total Market - Historical Data And Forecasts
Food & Drink
TABLE: Food Consumpti on Indicators - Historical Data And Forecasts
Other Key Sectors
TABLE: Oil and Gas Sector Key Indicators
TABLE: Pha rma Sector Key Indicators
TABLE: Defence and Security Sector Key Indicators
TABLE: Telecoms Sector Key Indicators
TABLE: Infrastructure Sector Key Indicators
TABLE: Freight Key Indicators
Chapter 6: BMI Global Macro Outlook
Global Outlook
Deflationary Pressure
Table : Global Assumpti ons
Table : Devel oped States , Real GDP Growt H, %
Table : Eme rgi ng Markets , Real GDP Growth , %

The Thailand Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Thailand. It is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Thailand's economic, political and financial prospects through end-2019, just published by award-winning forecasters, BMI  Research.

Key Uses

  • Forecast the pace and stability of Thailand's economic and industry growth through end-2019.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the operating environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Thailand's country risks against regional peers using BMI's country comparative Risk Index system.
  • Evaluate external threats to doing business in Thailand, including currency volatility, the commodity price boom and protectionist policies.

The Thailand Country Risk Report by BMI  Research includes four major sections: Economic Outlook, Political Outlook, Operational Risk and Key Sector Outlook.

Economic Outlook:

How will the Thailand' economic policy-making and performance impact on corporate profitability over 2015-2019?

BMI provides our fully independent 5-year forecasts for Thailand through end-2019 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Thailand Country Risk Report features BMI's forecasts with supporting analysis for 2015 through to end-2019, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:


  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Index system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector obligations).
  • Global Assumptions - forecasts for each year to end-2019 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Thailand and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Thailand, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Thailand over the next 5-years?

BMI's Thailand country Risk Index evaluates the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Thailand Market - Political Strengths, Weaknesses, Opportunities and Threats facing Thailand.
  • Political Stability and Risk Assessment - BMI's Risk Index assesses explicit short- and long-term risks to political stability; latest positioning and trends for Thailand's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.
  • Long-Term Political Outlook BMI examines the structural risks to the stability of Thailand’s political system and the dominant public policy issues likely to affect decision-makers, and outlines scenarios for how the state could evolve in the medium to long term.

Key Benefits

  • Benchmark Thailand's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Operational Risk

What are the current operational risks and difficulties associated with doing business in Thailand?

The Operational Risk section gives an evaluation of current risks and difficulties associated with operating in the market. It also provides a brief overview of the regional Operational Risk Index which benchmarks Thailand against its neighbours.

Operational Risk Contents

The chapter provides a summary of the main threats in the country, within:

  • Labour Market Risk (Education; Availability of Labour; and Labour Costs)
  • Logistics Risk (Market Size and Utilities; Quality and Extent of the Transport Governance)
  • Trade and Investment Risk (Economic Openness; Government Intervention; and Legal Risks)
  • Crime and Security Risk (Crime; Terrorism; and Interstate Conflict risks).

The report also drills down in greater depth to address key issues in one of the following segments most critical to the market:

  • Transport network, economic openness, cost and availability of labour, crime risks, bureaucratic environment, market size and utilities, and interstate conflict.
  • Assess your company’s exposure to country specific operational and business risks, using BMI’s insight on the current dangers of operating in the market.
  • Evaluate Thailand’s risk profile against its regional peers, helping you understand the market’s strengths and weaknesses in relation to other countries.

Key Sector Outlook*

Which industry sectors in Thailand will grow fastest, and where are the major investment opportunities in the market?

BMI identifies investment opportunities in Thailand's high growth industries including automotives, defence & security, food & drink, freight transport, infrastructure, oil & gas, pharmaceuticals & healthcare and telecommunications & IT.

Key Areas Covered:

  • Market Overview - Size and value of each industry, including recent sector developments and major industry key performance indicators (KPIs) that have impacted company performance.
  • 5-year Industry Forecasts - Forecasts for each year over 2015-2019, using BMI's proprietary industry modelling technique, which incorporates key domestic and international indicators - including economic growth, interest rates, exchange rate outlook, commodity prices and demographic trends - to provide fully integrated forecasts across and within each industry.
  • Demand- and Supply-Side Data/Forecasts - BMI's industry data covers both the output of each industry and the domestic demand, offering clear analysis of anticipated import/export trends, as well as capacity growth within each industry.

Key Benefits

  • Target strategic opportunities in high growth industries, which are benefiting from global mega trends, and thus offer strong investment and growth opportunities.
  • Compare the growth path of different industries to identify which are best placed to benefit from domestic and international economic prospects, and which have historically suffered from volatile growth trends - a key indicator of future risks.

*Not all Country Reports contain the Key Sector Outlook chapter. Please enquire above for more information.

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