Boston, MA -- (SBWIRE) -- 10/20/2014 -- Core Views

- With General Prayuth Chan-ocha being elected as Interim Prime Minister, the junta has gained full control of governance. Huge power amassed by the Junta could be left unchecked, risking a further deepening of the political divide. Political reforms meanwhile continue to lack clarity. While near-term stability bodes well for the economy, we maintain our downbeat outlook on Thai politics.

- While Thailand's economy has rebounded in Q214, we believe it has yet to turn the corner, as domestic demand has remained soft. That said, ongoing efforts by the junta to revive the economy will likely gain momentum. We are forecasting real GDP growth of 2.0% in 2014 and 4.1% in 2015. Policy uncertainty under military rule and high household debt remain salient risks in our view.

- We expect Thailand's budget to be ready at the start of FY2014/15, which will be a positive for the economy. The junta has exercised fiscal restraint while planning for the budget, and we believe that this will likely keep the country on a sustainable fiscal trajectory in 2015. That said, should the junta pursue populist measures in a bid to stay in power, this will pose downside risks to our forecasts.

- We believe that the Bank of Thailand (BoT) will maintain its growth bias, and are projecting the central bank to hold its benchmark repurchase rate steady at 2.00% for the remainder of 2014. That said, an economic rebound over the coming quarters will likely see the BoT start to normalise its benchmark rate in 2015. We therefore expect a total of 50 basis points (bps) worth of rate hikes in 2015.

- Recent political and social stability in Thailand, coupled with a likely growth rebound over the coming quarters, should provide considerable support for the currency. We hold a neutral outlook for the Thai baht, and are forecasting for the unit to average THB32.50/USD in 2014, followed by a mild appreciation to THB31.75/USD in 2015.

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Major Forecast Changes

- We have revised our current...

The Thailand Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Thailand and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Thailand's economic, political and financial prospects through end-2018, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses:

- Forecast the pace and stability of Thailand's economic and industry growth through end-2018.

- Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.

- Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.

- Contextualise Thailand's country risks against regional peers using BMI's country comparative Risk Rankings system.

- Evaluate external threats to doing business in Thailand, including currency volatility, the commodity price boom and protectionist policies.

The Thailand Business Forecast Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Business Environment and Key Sector Outlook.

Economic Outlook:

How will the Thailand economic policy-making and performance impact on corporate profitability over 2014-2018?

BMI provides our fully independent 5-year forecasts for Thailand through end-2018 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Thailand Business Forecast Report features BMI's forecasts with supporting analysis for 2014 through to end-2018, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

- Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.

- BMI's comprehensive Risk Rankings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

- Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).

- Balance of Payments - trade and investment, current and capital account.

- Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).

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