Business Monitor International


Thailand Business Forecast Report

Published 26 March 2014

  • 51 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
Thailand Business Forecast Report

Core Views

  • The Thai military's assumption of power following failed talks between rival factions in the ongoing political crisis raises the prospect of an unelected government being installed. Such a move would risk a violent pro-government backlash, and we maintain our view that the path of least resistance is for escalating violent unrest.

  • Thailand's economy is feeling the strain of the ongoing political turmoil, with real GDP growth contracting by 2.1% q-o-q in Q114, and it is difficult to see a quick recovery given our view that there is no end in sight to the crisis. The manufacturing and construction sectors are coming under pressure, while outperformance on the external front looks like it's here to stay.

  • The military's new budget proposal should help the Thai economy recover from its current stagnation. Measures such as freeing up funds for infrastructure projects and making overdue payments to rice farmers should rebuild consumer and investor confidence, while the fiscal accounts are unlikely to deteriorate significantly.

  • Inflationary pressures are likely to be muted over the coming months in spite of the negative real interest rate environment, as weak demand for credit amid high household debt and political uncertainty undermine money supply growth. We expect the Bank of Thailand (BoT) to hold its benchmark repurchase rate at 2.00% for the remainder of 2014, before hiking by 50 basis points in 2015.

  • Thailand's export outlook has darkened considerably since the onset of the political crisis, and shipments may fall further before they recover in line with the collapse seen in imports. Efforts by the military junta to restore short-term economic confidence are likely to prevent an outright export contraction, however, which should support a strong recovery in the trade and current account balances.

Major Forecast Changes

  • We have revised our current account forecast for 2014 to 0.8% of GDP from -0.4% of GDP previously, which would...

Table of Contents

Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Ratings
7
Domestic Politics
8
Military Coup Raises Civil War Threat
8
Long-Term Political Outlook
9
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Ratings
13
Economic Activity
14
Economic Resilience Fading Fast
14
Table: Macroeconomic Forecasts
14
Fiscal Policy
16
New Budget To Provide Economic Boost
16
Table: Fiscal Policy
16
Monetary Policy
17
Inflation Risks Evenly Balanced
17
Table: Monetary Policy
17
Balance Of Payments
18
Exports To Muddle Through As Surplus Rises
18
Table: Current Account
19
Chapter 3: 10-Year Forecast
21
The Thai Economy To 2023
21
Politics A Headwind, But Won't Prevent Solid Growth
21
Table: Long-Term Macroeconomic Forecasts
21
Chapter 4: Business Environment
25
SWOT Analysis
25
BMI Business Environment Risk Ratings
25
Business Environment Outlook
26
Table: BMI Business And Operation Risk Ratings
26
Institutions
27
Table: BMI Leg al Framewo rk Rati ng
27
Table: Labou r Force Qualit y
28
TABLE: ASIA - ANN UAL FDI INFLOWS
29
Table: Trade And Investment Ratings
30
Infrastructure
31
Market Orientation
32
TABLE: Top Export Destinations, 2002-2009 (USDmn)
32
Operational Risk
33
Chapter 5: Key Sectors
35
Defence
35
Table: Government Defence Expenditure, 2014-2018
36
Pharmaceuticals & Healthcare
39
Table: Pharmaceutical Sales, Historical Data And Forecasts
41
Table: Healthcare Expenditure Trends, Historical Data And Forecasts
42
Other Key Sectors
43
Table: Oil and Gas Sector Key Indicators
43
Table: Telecoms Sector Key Indicators
43
Table: Infrastructure Sector Key Indicators
43
Table: Food and Drink Sector Key Indicators
44
Table: Freight Key Indicators
44
Table: Autos Sector Key Indicators
44
Chapter 6: BMI Global Assumptions
45
Global Outlook
45
Emerging Market Deceleration
45
Table: Global Assumptions
45
Table: Developed States , Re al GDP Growt H, %
46
Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
46
Table: Eme rgi ng Markets , Re al GDP Growth , %
47

The Thailand Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Thailand and 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-2017, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of Thailand's economic and industry growth through end-2017.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Thailand's country risks against regional peers using BMI's country comparative Risk Rankings system.
  • Evaluate external threats to doing business in Thailand, including currency volatility, the commodity price boom and protectionist policies.

The Thailand Business Forecast Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Business Environment and Key Sector Outlook.

Economic Outlook:

How will the Thailand economic policy-making and performance impact on corporate profitability over 2013-2017?

BMI provides our fully independent 5-year forecasts for Thailand through end-2017 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 Business Forecast Report features BMI's forecasts with supporting analysis for 2013 through to end-2017, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • 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 Rankings 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 exposure).
  • Global Assumptions - forecasts for each year to end-2017 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 Rankings evaluate 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 Rankings assess explicit short- and long-term risks to political stability; latest ankings, rankings 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.

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.

Business Environment

Business Environment Risk Rankings with SWOT Analysis - Business Environment Risk Rankings for Thailand, benchmarked against rankings for regional neighbours.

Country Competitiveness - Competitiveness of Thailand's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Rankings.

Key Sector Outlook

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

BMI's 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 with developments over 2008-2012, covering major industry key performance indicators (KPIs) that have impacted company performance.
  • 5-year Industry Forecasts - Forecasts for each year over 2013-2017, using BMI's proprietary industry modeling technique, which incorporates all 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.

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Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express