Country Report Thailand January 2009

Outlook for 2009-10

• Thailand's political scene will remain unstable. Despite the election of a new prime minister, Abhisit Vejjajiva of the ruling Democrat Party (DP), on December 15th, the country's four-year power struggle will continue.
• As the economy enters recession, opposition protestors, led by the United Front of Democracy Against Dictatorship, will exploit increased economic hardship in an attempt to discredit the government and its policies.
• Given the serious political and economic challenges facing Thailand, Abhisit will have done well if his government remains in office in a year's time.
• Owing to the notably weaker outlook for the world economy, the Economist Intelligence Unit has downgraded its forecast for Thailand's GDP growth in 2009 to a contraction of 1%. The economy will grow by 2.6% in 2010.
• Based on the assumption that the economy will contract and that global prices for crude oil and non-oil commodities will fall sharply, we forecast that Thailand will experience mild deflation in 2009.
• The current account will remain in negative territory in 2009-10, as merchandise trade surpluses are offset by the deficits on the services and income accounts.

Monthly review

• The leader of the DP, Abhisit Vejjajiva, became the country's third prime minister in less than a year. In a vote on December 15th Abhisit secured 235 votes out of 437 sitting members of parliament.
• On December 29th thousands of anti-government protestors surrounded Thailand's parliament buildings, forcing the speaker, Chai Chidchob, to postpone Abhisit's inaugural speech on two occasions.
• Abhisit's appointment of a successful former investment banker, Korn Chatikavanij, as finance minister was well received, but his choices for industry minister and commerce minister were less warmly welcomed.
• Abhisit said that his government will retain the populist policies pursued by previous administrations and will implement a Bt300bn (US$8.6bn) stimulus package to support domestic demand during the economic downturn.
• The Bank of Thailand (the central bank) cut its policy interest rate. On December 3rd the bank cut the one-day repo rate by 100 basis points to 2.75%, a three-year low.
• Thailand's exporters had a disastrous month in November, as export revenue plunged by 18.6% year on year to US$11.9bn, the lowest level since July 2007.

Source: Country Report

This report covers the following industry codes:
SIC Code: 82;49;70
NAICS Code: 61;22;72

This report covers the following industry codes:
SIC Code: 82;49;70
NAICS Code: 61;22;72