Lewes, DE -- (ReleaseWire) -- 07/28/2014 -- 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. As a result, Thailand's economy is feeling the strain of the ongoing political turmoil, with real GDP growth contracting by 2.1% quarter-on-quarter 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.
Although some of our freight throughput forecasts are unchanged from last quarter, we had already 'priced in' a fair amount of political risk. The fact that cranes have been moved to Laem Chabang to help the port cope with demand is encouraging. Nevertheless, risks to all our freight throughput forecasts are tilted very much to the downside in light of ongoing developments.
Key Industry Data
>> Gross tonnage at Laem Chabang, the country's largest port, set to rise by 3.0% to 69.08mn tonnes in 2014, and will average growth of 3.8% a year over our medium-term forecast period to 2018.
>> At the Port of Bangkok, BMI projects that tonnage will grow by 3.2% in 2014, to 21.01mn tonnes, with container handling set to grow by 7.0%, to 1.61mn TEUs.
>> We forecast the real value of foreign trade to grow 1.1% in 2014, with imports up by 0.2% and exports up by 2.0%.
>> 2014 air freight tonnage growth forecast at 1.2% and to average 1.8% a year to 2018.
>> 2014 rail freight tonnage throughput forecast to grow by 4.9%, to 12.9mn tonnes, and to grow on average by 5.1% a year to 2018.
>> Road freight tonnage expected to increase by 2.6% in 2014, to reach 447.36mn tonnes
Key Industry Trends
>> Ports Carry On Regardless: Thai ports have carried on operating through the recent political upheavals in the country. Following months of political stalemate between the government and opposition protestors, the army staged a coup in May and put the country under martial law, including a curfew. However, it has been reported that the curfew has not negatively affected port operations.
>> Southern Track Renewal To Start In May: The track renewals and earthworks enhancement programme worth THB6bn (USD185.15mn) is due to start in May 2014, according to State Railway of Thailand governor, Prapat Chongsanguan. The work will concentrate on the 1,200km main line running south from Bangkok, with the goal of increasing line speeds and enhancing safety on the metre-gauge network.
>> Thai Cargo Validated For EU: It was reported in March that Thai Cargo had been successfully validated as ACC3 in terms of security at its Bangkok station. The carrier was seeking further ACC3 validation for its stations at the Indian airports of New Delhi and Chennai (Madras).
Key Risks To Outlook
>> There are serious risks to all of our forecasts for Thailand at present, both in terms of freight transport, and the wider macroeconomic outlook. The country's political crisis, which had been ongoing for months before the Thai army stepped in and seized power, has paralysed businesses and investment projects. At present it is unclear when political stability will be resolved, and so it is hard to project with any certainty what will
happen through the remainder of 2014.
>> Further political risk comes from the international sphere; rising maritime tensions with neighbour China risk disrupting shipping activities.
See table of contents & more details about this report at: - http://www.marketresearchreports.com/business-monitor-international/thailand-freight-transport-report-q3-2014
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