Thailand 

Thailand country policy

Policy established 19 February 2009

• ILC, bank guarantee or central public guarantee (conditional)
• The country ceiling is 2000 mln euro
• Early warning signal 1500 mln euro
• - of which was used as at 2011-12-31 0 mln euro

Country class: 3

Thailand country facts

Atradius DSB Economic Research
Country Report last updated 13 February 2009

Country THAILAND 

Political Situation
Unstable

Head of state
King Bhumibol Adulyadej; PM Abhisit Vejjajiva (since December 2008)

Form of government
New coalition government led by the Democratic Party of Abhisit Vejjajiva. He has appointed several PAD supporters as ministers.
 
Member of
UN; ASEAN; APEC; IMF; IBRD; WTO; ADB.

Internal Economic Situation
Deep Recession

General situation
Thailand’ economy is largely export driven. It has specialized in electronics and automotive parts, two sectors that are particularly badly hit. The country’s most important export markets are in recession. Foreign investment and consumer confidence are low due to the persistent political instability. Economic growth is therefore expected to contract with 4.4% over 2009. 
Corruption is widespread (CPI=3.6), but level of bureaucracy and labour market regulation are favorable compared to the region. The Thai baht has been overvalued due to the yen carry trade. Some downward pressure is now expected.
The health of the banking sector has improved significantly over the long run. NPL’s are now estimated at 6% of total loans, but this ratio is expected to deteriorate again due to the current recession.

External Economic Situation
Export & Tourism Decline; Sovereign Risk REMAINS GOOD
Main sources of foreign exchange
Exports of manufactures (86% of exports, electronics 28%, textiles 6%), agricultural and fishery products (10%), vehicles (6%)

Main foreign markets
US (15%), EU (15%), Japan (13%), Singapore (6%), P.R. China (9%), Hong Kong (5%), Malaysia (5%).

Main expenses of foreign exchange
Capital goods (47%), intermediate goods (27%), fuel (11%).

Balance of payments 

External economic situation
Sovereign payment capacity is guaranteed by low external debt ratio's and sufficient reserves.
  The current credit crunch has deteriorated the economic prospects of Thailand’s export markets (Japan, Singapore, USA). Thailand specializes in relatively high value-added (and thus expensive) manufacturing products, which are currently hit particularly badly due to the global recession.