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
Major Forecast Changes
5
Key Risks
5
Chapter 1: Economic Outlook
7
SWOT Analysis
7
BMI Economic Risk Index
7
Economic Growth Outlook
8
Shrugging Off Drought Impact
8
GDP By Expenditure Outlook
9
TABLE: GDP GROWTH FORECASTS
9
TABLE: PRIVATE CONSUMPTION FORECASTS
10
TABLE: GOVERNMENT CONSUMPTION FORECASTS
10
TABLE: FIXED INVESTMENT FORECASTS
10
TABLE: NET EXPORTS FORECASTS
10
Fiscal Policy And Public Debt Outlook
11
Fiscal Reforms Taking Shape
11
Structural Fiscal Position
12
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES
12
External Trade And Investment Outlook
13
External Surplus A Double-Edged Sword
13
Outlook On External Position
15
TABLE: CAPITAL & FINANCIAL ACCOUNT BALANCE
16
TABLE: MAIN EXPORT AND IMPORT PARTNERS
16
TABLE: MAIN EXPORTS AND IMPORTS
16
Monetary Policy
16
Long Pause Ahead For BoT
16
Monetary Policy Framework
18
Currency Forecast
19
THB: Modest Strength Likely
19
TABLE: CURRENCY FORECAST
20
Chapter 2: 10-Year Forecast
21
The Thai Economy To 2025
21
Political Uncertainty The Main Growth Obstacle
21
TABLE: LONG-TERM MACROECONOMIC FORECASTS
21
Chapter 3: Political Outlook
25
SWOT Analysis
25
BMI Political Risk Index
25
Domestic Politics
26
Drought Could Have Severe Political Implications
26
TABLE: POLITICAL OVERVIEW
26
Long-Term Political Outlook
27
Greater Political Turbulence Ahead, As Royal Succession Looms
27
Chapter 4: Operational Risk
31
SWOT Analysis
31
Operational Risk Index
31
Operational Risk
32
TABLE: OPERATIONAL RISK SCORES
32
Economic Openness
33
TABLE: TOP 5 IMPORT PARTNERS & PRODUCT IMPORTS, 2010-2014, USDMN
33
TABLE: FREE TRADE AGREEMENTS
34
TABLE: FREE TRADE ZONES AND INVESTMENT INCENTIVES
35
Availability Of Labour
37
TABLE: ASIA - AVAILABILITY OF LABOUR RISK
38
TABLE: LABOUR FORCE EMPLOYMENT BY SECTOR ('000), 2007-2012
39
Chapter 5: BMI Global Macro Outlook
43
Global Macro Outlook
43
Summer Of Risk
43
TABLE: GLOBAL ASSUMPTIONS
43
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
44
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
45
TABLE: MACROECONOMIC DATA & FORECASTS
47

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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