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Thailand Country Risk Report Q2 2020

Published by Fitch Solutions, Inc. Product code 203091
Published annual subscription Content info 65 Pages
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Thailand Country Risk Report Q2 2020
Published: annual subscription Content info: 65 Pages
Description

We at Fitch Solutions believe Thailand's economy in 2020 will continue to face the similar headwinds it has met during 2019, curbing the potential for a strong

rebound in activity. External challenges are set to persist, widening net exports' drag on headline growth, and we expect a further moderation of household

demand, given high indebtedness and weaker job growth prospects. As such, growth will be highly dependent on the effect of fiscal and monetary stimulus, with

risks of delays to the former and insufficient impact from the latter. We now forecast growth in 2020 to rebound to 3.0%, from a forecast 2.8% in 2019, having

previously expected a stronger pick-up in growth at 3.5%.

We believe the Bank of Thailand (BoT) will take a cautious approach to further monetary easing over the coming quarters. We have maintained our forecast for

the key policy rate to be kept on hold at 1.25% through 2020 but note risks of further easing are higher given the impact of the novel coronavirus (2019-nCoV)

outbreak on the country's tourism sector. The key reason for the BoT's cautious approach are policy constraints we do not foresee abating in the coming quarters;

namely high household indebtedness, slowing economic growth, Thai baht strength and ongoing trade negotiations with the US.

Thailand's fiscal packages will target boosting domestic consumption, export-orientated sectors and investment as well as encouraging foreign direct investment

over the coming quarters. The fiscal packages will not pose a threat to Thailand's fiscal position, which remains well managed under the Fiscal Responsibility Act.

However, we note the boost to the economy may be less than intended given weak domestic confidence and longer-term structural issues. Moreover, delays

to the passing of the 2020 budget could mean fiscal policy fails to act as a buffer through Q120.

Table of Contents
Product Code: CFTH_20200401

Table of Contents

Executive Summary

  • Core Views
  • Major Forecast Changes
  • Key Risks
  • Country Risk Summary
  • Economic Risk Index
  • Political Risk Index
  • SWOT
  • Economic - SWOT Analysis
  • Political - SWOT Analysis
  • Economic Outlook
  • Economic Growth Outlook
  • Thailand Growth Faces Significant Downside Threat From Coronavirus Outbreak
  • GDP By Expenditure Outlook
    • TABLE: GDP GROWTH FORECASTS
    • TABLE: PRIVATE CONSUMPTION FORECASTS
    • TABLE: GOVERNMENT CONSUMPTION FORECASTS
    • TABLE: FIXED INVESTMENT FORECASTS
    • TABLE: NET EXPORTS FORECASTS
  • Outlook On External Position
    • TABLE: CAPITAL & FINANCIAL ACCOUNT BALANCE
    • TABLE: CURRENT ACCOUNT BALANCE FORECASTS
    • TABLE: MAIN EXPORT AND IMPORT PARTNERS IN 2017
    • TABLE: MAIN EXPORTS AND IMPORTS IN 2017
  • Monetary Policy
  • Rate Cut No Signal For Aggressive Easing Cycle In Thailand
  • Monetary Policy Framework
    • TABLE: MONETARY POLICY FORECASTS
  • Fiscal Policy And Public Debt Outlook
  • Thailand Budget Signals Greater Fiscal Stimulus Focus
  • Structural Fiscal Position
    • TABLE: FISCAL AND PUBLIC DEBT FORECASTS
  • Currency Forecast
  • THB: Thai Policymakers' Headache To Continue With Baht Appreciation
    • TABLE: FITCH SOLUTIONS CURRENCY FORECAST
  • THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.Thailand Country Risk Q2 2020Contents10-Year Forecast
  • The Thai Economy To 2029
  • Political Uncertainty The Main Growth Obstacle
    • TABLE: LONG-TERM MACROECONOMIC FORECASTS
  • Political Outlook
  • Domestic Politics
  • Opposition Protests Not A Threat To Near-Term Political Stability In Thailand
    • TABLE: POLITICAL OVERVIEW
  • Long-Term Political Outlook
  • Uncertainty Ahead Despite Tight Military Grip
  • Operational Risk
    • TABLE: OPERATIONAL RISK
  • Conflict Risk
    • TABLE: MAIN ACTIVE TERRORIST GROUPS
    • TABLE: POLITICAL VIOLENCE RISK
    • TABLE: MILITARY PROFILE AND DEFENCE AGREEMENTS
    • TABLE: MAJOR INTERSTATE CONFLICT FLASHPOINTS
    • TABLE: BUSINESS RESPONSE TO CONFLICT RISK
  • Transport Network
    • TABLE: ROAD RISKS
    • TABLE: RAIL RISKS
    • TABLE: PORTS AND INLAND WATERWAYS RISKS
    • TABLE: AIR TRANSPORT RISKS
  • Global Macro Outlook
  • Economic Stabilisation Continues And Inflation Picking Up Slowly
    • TABLE: GLOBAL MACROECONOMIC FORECASTS (2019-2024)
    • TABLE: DEVELOPED MARKETS - REAL GDP GROWTH, % y-o-y
    • TABLE: EMERGING MARKETS - REAL GDP GROWTH, % y-o-y
  • Index Tables
    • TABLE: THAILAND - MACROECONOMIC DATA AND FORECASTS
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