1. Market Research
  2. > Energy & Environment
  3. > Energy
  4. > Oil and Gas Energy Market Trends
  5. > Thailand Country Risk Report Q2 2016

Thailand Country Risk Report Q2 2016

  • March 2016
  • -
  • Business Monitor International
  • -
  • 41 pages

Core Views The military junta has been successful in returning Thailand to political stability following the 2014 coup, but we are not yet willing to upgrade the country's low Political Risk Index scores as fundamental divisions between the 'red shirts' and the 'yellow shirts' remain, and the impending royal succession has the potential to trigger renewed unrest. Thailand's real GDP growth of 2.8% y-o-y in Q415 reflects the positive impact of the government's renewed infrastructure drive and the negative effects of weakening external demand. With the construction sector likely to continue to benefit from a number of major project commencements, and low oil prices having a positive impact on the country's terms of trade, we forecast real GDP growth to pick up slightly to 3.0% in 2016, from 2.8% in 2015.

We hold a mildly bullish view on the Thai baht as we believe that the terms of trade gains due to falling raw material input prices will continue to support the country's current account, while there is scope for portfolio flows to return following a lengthy period of outflows. Falling external demand from China, and yuan weakness, together with the potential for a renewed flare-up in political risk, are main downside risks facing the baht. Thailand's current account surplus has surged to the highest level since the Asian Financial Crisis despite relatively modest baht depreciation and continued strong non-oil imports. The concomitant huge outflows in the portfolio account have hit record levels, but these could return over the coming quarters should the country avoid an economic and/or political crisis.

While the military government will continue to increase spending to sustain Thailand's economic recovery, positive steps taken to rein in wasteful spending will keep expenditure growth in check. Coupled with the prospects for higher fiscal revenue on the back of a gradually improving economy and the windfall receipts from the recent spectrum auctions, Thailand should have the fiscal resources to finance its eight-year master infrastructure plan. Major Forecast Changes We have revised down our real GDP forecast to 3.0% for 2016, compared with our previous forecast of 3.3% and the 2015 figure of 2.8%. That said, an acceleration in growth from 2015 will come in spite of continued external headwinds, most notably from the weakness in Chinese growth. We forecast the Thai baht to average THB35.40/USD in 2016, marking an upward revision from THB36.50/USD previously.

Table Of Contents

Thailand Country Risk Report Q2 2016
Executive Summary 5
Core Views5
Major Forecast Changes5
Key Risks5
Chapter 1: Economic Outlook 7
SWOT Analysis 7
BMI Economic Risk Index 7
Economic Growth Outlook 8
GDP Report A Mixed Picture 8
Thailand's real GDP growth of 28% y-o-y in Q415 reflects the positive impact of the government's renewed infrastructure drive and the
negative effects of weakening external demand With the construction sector likely to continue to benefit from a number of major project
commencements, and low oil prices having a positive impact on the country's terms of trade, we forecast real GDP growth to pick up
slightly to 30% in 2016, from 28% in 2015
GDP By Expenditure Outlook 9
TABLE: GDP GROWTH FORECASTS9
TABLE: PRIVATE CONSUMPTION FORECASTS9
TABLE: GOVERNMENT CONSUMPTION FORECASTS10
TABLE: FIXED INVESTMENT FORECASTS10
TABLE: NET EXPORTS FORECASTS 10
Monetary Policy 10
BoT To Remain On Hold But Downside Risks Growing10
The Bank of Thailand is likely to maintain its policy rate at 150% for the remainder of 2016 as real GDP growth remains stable and core
inflation remains positive However, the continued negative headline inflation print suggests the risks are weighted to the downside, and
a further slowdown in global growth could see the central bank lower rates further
Monetary Policy Framework 11
External Trade And Investment Outlook 12
Terms Of Trade Improvement A Major Boost To External Picture12
Thailand's current account surplus has surged to the highest level since the Asian Financial Crisis despite relatively modest baht
depreciation and continued strong non-oil imports The concomitant huge outflows in the portfolio account hit a record level, but could
return over the coming quarters should the country avoid an economic and/or political crisis
Outlook On External Position 13
TABLE: CAPITAL and FINANCIAL ACCOUNT BALANCE13
TABLE: MAIN EXPORT AND IMPORT PARTNERS14
TABLE: MAIN EXPORTS AND IMPORTS14
Fiscal Policy And Public Debt Outlook 15
Manageable Fiscal Profile Supportive Of Growth15
While the military government will continue to increase spending to sustain Thailand's economic recovery, positive steps taken to rein in
wasteful spending will keep expenditure growth in check Coupled with the prospects for higher fiscal revenue on the back of a gradually
improving economy and the windfall receipts from the recent spectrum auctions, Thailand should have the fiscal resources to finance its
eight-year master infrastructure plan
Structural Fiscal Position 16
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES16
Currency Forecast 17
THB: Terms Of Trade Gain Supports Stronger Baht17
We hold a mildly bullish view on the Thai baht as we believe that the terms of trade gains due to falling raw material input prices will
continue to support the country's current account, while there is scope for portfolio flows to return following a lengthy period of outflows
Falling external demand from China, and yuan weakness, together with the potential for a renewed flare-up in political risk, are main
downside risks facing the baht
TABLE: CURRENCY FORECAST17
Chapter 2: 10-Year Forecast 19
The Thai Economy To 2025 19
Political Uncertainty The Main Growth Obstacle19
Ongoing political uncertainty, deteriorating demographic trends, and a lack of reform momentum are likely to undermine Thailand's longterm
economic growth trajectory As such, we forecast real GDP growth to average 38% annually over the period from 2016 to 2025,
making it a regional growth laggard over the coming years
TABLE: LONG-TERM MACROECONOMIC FORECASTS19
Chapter 3: Political Outlook 23
SWOT Analysis 23
BMI Political Risk Index 23
Domestic Politics 24
Stability Returns, But Fundamental Risks Remain24
The military junta has been successful in returning Thailand to political stability following the 2014 coup, but we are not yet willing to
upgrade the country's low Political Risk Index score as fundamental divisions between the 'red shirts' and the 'yellow shirts' remain, and
the impending royal succession has the potential to trigger renewed unrest
TABLE: POLITICAL OVERVIEW24
Long-Term Political Outlook 25
Greater Political Turbulence Ahead, As Royal Succession Looms25
Thailand will experience greater political turmoil over the coming decade, as the eventual passing of the king will remove a major arbiter,
worsening the schism between the 'red shirts' and 'yellow shirts' The most likely scenario is a dysfunctional democracy with unstable
governments, with the military playing a strong role At worst, rising political violence could push the country towards civil conflict
Chapter 4: Operational Risk 29
SWOT Analysis 29
Operational Risk Index 29
Operational Risk 30
TABLE: OPERATIONAL RISK SCORES30
Trade Procedures And Governance 31
TABLE: ASIA - TRADE PROCEDURES AND GOVERNANCE RISK 31
TABLE: IMPORT and EXPORT DOCUMENTS32
TABLE: TRADE PROCEDURES BREAKDOWN32
Vulnerability To Crime 33
Chapter 5: BMI Global Macro Outlook 37
Global Macro Outlook 37
Tail Risks Mounting Amid Sub-Par Growth37
TABLE: GLOBAL ASSUMPTIONS37
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %38
TABLE: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, 2015 AND 2016 (%) 38
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %39
TABLE: MACROECONOMIC DATA and FORECASTS41

View This Report »

Get Industry Insights. Simply.

  • Latest reports & slideshows with insights from top research analysts
  • 24 Million searchable statistics with tables, figures & datasets
  • More than 10,000 trusted sources
24/7 Customer Support

Talk to Veronica

+1 718 514 2762

Purchase Reports From Reputable Market Research Publishers
Crude Oil Flow Improvers Market by Type, Application, Supply Mode - Global Forecast to 2021

Crude Oil Flow Improvers Market by Type, Application, Supply Mode - Global Forecast to 2021

  • $ 12000
  • Industry report
  • September 2016
  • by MarketsandMarkets

“Rise in crude oil production worldwide drives the COFI market” The global market size of COFI is estimated to reach USD 1.73 billion by 2021 from 1.32 billion in 2016, at a CAGR of 5.5%. Excessive ...

Filter Bags Market - Global Industry, Size, Share, Growth, Trends and Forecast 2016 - 2024

Filter Bags Market - Global Industry, Size, Share, Growth, Trends and Forecast 2016 - 2024

  • $ 7000
  • Industry report
  • September 2016
  • by Transparency Market Research

The filter bags market report provides an in-depth analysis of the global filter bag market for the period 2014 – 2024, wherein 2015 is the base year and the years from 2016 to 2024 is the forecast period. ...


ref:plp2016

Reportlinker.com © Copyright 2016. All rights reserved.

ReportLinker simplifies how Analysts and Decision Makers get industry data for their business.