Boston, MA -- (ReleaseWire) -- 04/29/2014 -- Thailand's political stalemate has had a devastating impact on economic growth, and with no signs of a possible resolution in the near term, we expect economic activity to remain depressed in H114. Latest data published by the Bank of Thailand (BoT) showed that the Thai economy expanded by 0.6% year-on-year in Q413, translating into full year growth of just 2.9% for 2013. Crucially, we highlight the sharp contraction in gross fixed capital formation (GFCF) and private consumption in Q413 (-11.3% and -4.5% y-o-y, respectively), which suggests that businesses and households are keeping their spending plans on hold as they await further clarity on the political situation.
The latest data has reaffirmed our view that economic growth in Thailand will come in disappointingly weak for 2014. Consequently, we have downgraded our real GDP growth forecast from 3.8% to 3.2%. BMI's outlook for the freight transport sector is for positive volume growth in a 1-5% range. Freight transport infrastructure investment projects and Thailand's increasing role in intra-regional trade should keep the industry growing a little faster than the economy as a whole, though we acknowledge serious downside risk to this outlook from the above.
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Headline Industry Data
- Gross tonnage at Laem Chabang, the country's largest port, set to rise by 3.0%, to 69.08mn tonnes in 2014 (compared to the estimated 4.1% growth in 2013).
- At the Port of Bangkok, BMI projects that tonnage growth will reach 4.2% growth in 2014 (marginally up from 4.1% in 2013), to 20.23mn tonnes.
- We forecast the real value of foreign trade to grow 4.6% in 2014, with imports up by 5.2% and exports up by a smaller amount, at 3.9%.
- 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
DB Schenker Launches Asia Truck Network: In February German logistics giant DB Schenker launched an 'Asia Landbridge'. The service will range across Asia, conenctnig 23 key cities through the ASEAN countries of Singapore, Malaysia, Myanmar, Cambodia, Vietnam, Laos and Thailand, according to chairman of the company's management board, Thomas Lieb.
Precious Orders Eight New Vessels From Taizhou Sanfu: China-based shipbuilder Taizhou Sanfu Ship Engineering has secured an order of eight vessels from Thailand-based Precious Shipping. The shipbuilding contracts consist of four 39,000 deadweight tonnage (DWT) vessels and four 64,000 DWT bulk carriers.
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