Boston, MA -- (SBWIRE) -- 04/10/2014 -- The latest real GDP growth reading came in disappointingly weak at a seasonally adjusted 1.3% quarter-on-quarter (q-o-q) in Q313. Crucially, the latest figures suggest that cooling external demand is beginning to impact household spending and business investment. Escalated political tensions will also further dampen investor sentiment and economic activity into 2014.

We have downgraded our real GDP growth forecast for Thailand from 3.8% to 3.2% for 2014. With no signs of a possible resolution to the political impasse and violent protests, the risk of a sustained contraction in gross fixed capital formation over the coming quarters presents the biggest threat to Thailand's economic outlook in 2014 and 2015.

Headline Industry Data (local currency)

- 2014 food consumption growth (local currency): +6.4%; compound annual growth rate (CAGR) 2014 to 2018: +4.9%.
- 2014 per capita food consumption growth (local currency): +6.1%; CAGR to 2018: +4.7%.
- 2014 alcoholic drinks value (local currency) sales: +5.4%; CAGR to 2018: +4.2%.
- 2014 total soft drinks value (local currency) sales: +7.2%; CAGR to 2018: +6.2%.
- 2014 mass grocery retail (MGR) sales (local currency): +1.6%; compound annual growth rate (CAGR) 2014 to 2018: +1.7%.

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Key Industry Trends

Thai Rice To Flood Global Markets As Subsidy Ends: Millions of tonnes of Thai rice are set to flood into already oversupplied international markets when the government's controversial subsidy scheme grinds to a halt later in March. The country's caretaker government said it did not have the power to renew the programme, which has paid farmers in one of the world's top exporters of rice nearly double market rates and is due to expire at the end of March.

That will force farmers to offload the March harvest into a market currently dominated by India and Vietnam. With Bangkok already shifting grain from record government stockpiles, the sales threaten to worsen a supply glut that has dragged on international prices. While many rice farmers are expected to remain loyal to Prime Minister Yingluck Shinawatra, who swept to power in 2011 on the back of rural votes generated in part by the subsidies, a slump in prices that could be blamed on her leadership would erode her support base and be another blow for her embattled government.

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