Stable outlook but increased downside risks


LOW RISK for entreprise

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

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GDP USD455.221bn (World ranking 25, World Bank 2017)
Population 69.04mn (World ranking 25, World Bank 2017)
Form of state Constitutional Monarchy
Head of government Prayut Chan-o-cha
Next elections 2023, General election
  • Moderate public debt and acceptable fiscal deficits
  • Appropriate monetary policy management
  • Solid commercial banks with high level of provision and capital
  • Manageable external debt burden
  • Regional trade hub
  • Well diversified economy
  • Strong tourism sector
  • Chronic political instability since 2006, with the overthrow of the elected government in a military coup in May 2014
  • Asset quality of specialized financial institution is weaker than that of commercial banks
  • Dependence on Chinese trade links

Resilient but decelerating growth

After strong GDP growth of +4.1% in 2018, we expect Thailand to be increasingly affected by the global downturn in trade and the uncertainty surrounding the US-China trade feud. While fiscal stimulus and an accommodating monetary policy are expected to partially offset the effects of the deteriorating external environment, current policy uncertainty might undermine business and consumer confidence to some extent, and could limit the growth momentum in the near term. After the general elections in spring 2019, no party now has a majority of seats in the House of Representatives. This could complicate political processes, such as the selection of the prime minister, although the current military rule is likely to remain in place for some time. Overall, we expect economic growth to decelerate but remain resilient at around +3.7% in 2019.

Solid external position

Thailand enjoys a solid external position. The current account surplus remained large at around +7.5% of GDP in 2018, even though this was down from a peak of +11.7% in 2016. Its export dependence makes Thailand also particularly vulnerable to the recent slowdown in global trade and weakening demand in advanced economies, as well as uncertainty around the US-China trade feud. As a result, we expect the current account surplus to narrow further in 2019-2020, though it should remain well in positive territory.

Thailand’s foreign exchange reserves are ample and currently cover more than eight months of imports. Furthermore, external debt stood at an adequate level of 35.2% of GDP at end-2018 and should remain in check for the foreseeable future. 

Steadily improving business environment

Thailand increased its score in the World Banks’s Ease of doing business survey to 78.45 points in 2018 (out of 100), from 77.39 in 2017, and remained in the top 30 out of 190 countries surveyed. Recent reform efforts led to the improvement in starting a business, getting electricity, paying taxes and trading across borders, especially for SMEs. 

Trade structure by destination/origin

(% of total)

Exports Rank Imports
China 17%
26% China
United States 12%
15% Japan
Japan 8%
7% Malaysia
Malaysia 5%
5% United States
Viet Nam 5%
4% South Korea

Trade structure by product

(% of total)

Exports Rank Imports
Computer Equipment 9%
8% Crude Oil
Cars And Cycles 6%
6% Electrical Apparatus
Engines 5%
5% Electronic Components
Telecommunications Equipment 5%
5% Iron and steel
Electronic Components 5%
5% Telecommunications Equipment

The payment behavior of Thai companies is fairly good, but regulations are limited when it comes to late payments.

  • Low

  • Medium

  • Sensitive

  • High

  • Payments

  • Court proceedings

  • Insolvency proceedings

Although domestic courts are fairly independent, the rule of law perception has margin for improvement, as procedural delays and costs may be an issue and enforcing court decisions can be challenging. Overall, use of the courts should be avoided and conducting pre-legal collection action is advisable.

Collecting debt from insolvent debtors is often extremely difficult, especially when the debt is not secured.

Download the entire collection complexity PDF:

Collection complexity Thailand

pdf | 1 MB


Contact Euler Hermes

Economic Research Team

Contact Mahamoud Islam

Senior Economist for Asia 

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