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

  • Thailand's real GDP growth print, which came in disappointingly weak at just 2.7% year-on-year (y-o-y) in Q313, remains generally consistent with our view that cooling external demand will continue to weigh on headline growth over the coming quarters. However, we see increasing risks that political tensions could further dampen investor sentiment and economic activity as we head into 2014. Subsequently, we have downgraded our 2013 real GDP growth forecast from 4.0% to 3.6%, and we expect growth to remain subdued at 4.3% in 2014.

  • We view the Bank of Thailand (BoT)'s decision to lower its policy rate to 2.25% in November as a means to counter the recent spate of weak economic data rather than a move to bolster confidence amid rising political tensions. Although lower interest rates should help to bolster business investment at the margin, we expect moderating regional growth over the coming quarters to remain the main theme for Thailand's economic outlook in 2014.

  • We view the expansion of rice and rubber subsidies as a major setback for government efforts to fix the country's fiscal imbalances. We forecast the government to achieve a balanced budget only by around 2018-2019 (compared to the government's target of 2017), notwithstanding new policies that will substantially raise subsidies over the coming years.

Major Forecast Changes

  • We have revised our policy rate forecast for 2014 from 2.50% to 2.25% to reflect the latest rate cut implemented by the Bank of Thailand on November 27. We maintain our stable outlook for monetary policy in 2014.

Key Risks To Outlook

  • Downside Growth Risks From Deteriorating Fiscal Position: In the event of a substantial decline in rice prices over the coming months, we could see the government suffering massive losses as a result of its rice policy. This could weigh on the government's ability to finance large-scale investment projects, resulting in project delays and putting downward pressure on economic...

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
Political Article
8
NACC Charges To Remove Yingluck From Power
8
Long-Term Political Outlook
8
Three Scenarios For The Next Decade
8
Chapter 2: Economic Outlook
11
SWOT Analysis
11
BMI Economic Risk Ratings
11
Economic Activity
12
Growth Downgraded Amid Deteriorating Business Sentiment
12
TABLE: ECONOMIC ACTIVITY
12
Fiscal Policy
13
Mounting Losses On Rice Policy Undermine Fiscal Outlook
13
TABLE: FISCAL POLICY
14
Monetary Policy
15
Mild Inflationary Pressures And Weak Baht To Keep Rates On Hold
15
TABLE: MONETARY POLICY
15
FX Forecast
16
THB: Neutral Outlook But Downside Risks Dominate
16
table: CURRENCY FORECAST
16
TABLE: EXCHANGE RATE
17
Chapter 3: 10-Year Forecast
19
The Thai Economy to 2023
19
Politics Hold Key To Long-Term Growth
19
TABLE: Alternate Scenario A: Real GDP Growth & Percentage Point Contributions By Expenditure
19
TABLE: Core Scenario: Real GDP Growth & Percentage Point Contributions By Expenditure
19
TABLE: Alternate Scenario B: Real GDP Growth & Percentage Point Contributions By Expenditure
21
TABLE: Long-Term Macroeconomic Forecasts
21
Chapter 4: Business Environment
23
SWOT Analysis
23
BMI Business Environment Risk Ratings
23
Business Environment Outlook
24
Table: BMI Business And Operation Risk Ratings
24
Institutions
25
Table: BMI Legal Framework Rating
25
Table: Labour Force Quality
26
TABLE: ASIA - ANNUAL FDI INFLOWS
27
Table: Trade And Investment Ratings
28
Infrastructure
29
Market Orientation
29
TABLE: Top Export Destinati ons , 2002-2009 (US$mn )
30
Operational Risk
31
Chapter 5: Key Sectors
33
Autos
33
TABLE: Autos Sales, 2012-2018
34
TABLE: Autos Production, 2013-2018
35
TABLe: Conditions To Be Eligible For Phase Two Of The Eco-Car Scheme
36
TABLE: Autos Trade Balance, 2012-2018
36
Food & Drink
37
TABLE: Food Consumption Indicators - Historical Data & Forecasts, 2010-2017
40
Other Key Sectors
41
table: Oil and Gas Sector Key Indicators
41
table: Pharma Sector Key Indicators
41
table: Infrastructure Sector Key Indicators
41
table: Telecoms Sector Key Indicators
42
table: Freight Key Indicators
42
table: Defence and Security Sector Key Indicators
42
Chapter 6: BMI Global Assumptions
43
Global Outlook
43
Global Growth Optimism Turning To Disappointment
43
Table: Global Assumptions
43
Table: Developed States, Real GDP GrowtH, %
44
Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
44
Table: Emerging Markets, Real GDP Growth, %
45

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 Ratings 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 Ratings 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 Ratings 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 Ratings assess explicit short- and long-term risks to political stability; latest ratings, 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 Ratings with SWOT Analysis - Business environment Risk Ratings for Thailand, benchmarked against ratings 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 Ratings.

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