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Market |
Defence |
Report Type |
Market Research |
Country |
Thailand |
Published |
28 May 2009 |
Number of Pages |
39 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
The key issue for Thailand remains: to what extent will a clearly deteriorating economic environment exacerbate tensions between the ‘yellow shirt’ supporters of new Prime Minister Abhisit Veijajiva and the ‘red shirt’ supporters of ousted former Prime Minister Thaksin Shinawatra.
The Thai economy has in all probability already entered a technical recession, although Q109 data has not been released as we go to press. The external outlook is grim with exports continuing to tumble at the start of the year, falling by 25.3% y-o-y in January. Manufacturing production has fallen in tandem with exports, registering a 21.3% contraction in the same month and the Bank of Thailand (BoT)'s business sentiment index, coming in at a subdued 36.3 (where 50 delineates expansion/contraction), suggests continued depressed sentiment. Similarly, consumer confidence remains weak, as reflected in the 29.3% y-o-y decline in domestic vehicle purchases in January.
Although we have seen a partial lull in tensions since the December 15 parliamentary vote that brought a change in administration, there is little doubt that the new Democrat-led government under Prime Minister Abhisit Vejjajiva will remain subject to both internal and external pressures that could threaten its very viability.
Credibility-wise the government has already suffered a number of early setbacks. Perhaps most notably, on February 3 Abhisit suffered his first cabinet resignation when the Minister of Social Development and Human Security, Witoon Nambutr, stepped down following a corruption scandal.
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