Ake, a former colleague of mine from TSCAP days, has started a great informative site charting the economic developments of Thailand, www.factforthought.com, and has graciously allowed me to use some of his slides for presentations and for on here as well.

Due to the flood crisis in Thailand, downgrades for Thai 2011 GDP are to be expected, we’ve seen both local and international research houses estimate on average a 1.5-2% decrease in GDP this year. The Bank of Thailand itself recently downgraded its forecast to 2.6% from 4.1% and now a lot of people are forecasting further doom and gloom for this country. I completely disagree…..

Source: http://www.factforthought.com/premium/1-01-gdp-growth-consensus-projections/

While the consequences of the flood crisis will negatively impact corporate earnings for the next 3-6 months, I’m still very comfortable with the medium and long term outlook for Thailand. The government’s already announced stimulus packages, corporate income tax reduction and now an additional stimulas package (THB 400 bn/USD13 bn) to rebuild the water management system here will bode well for the country’s growth over the next few years. Furthermore Thailand’s logistic importance as a hub for the region will not be diminished by this, this country still has the best infrastructure system (ignoring Singapore b/c its far too small to be anything other than a services-oriented country for he region), a strong supportive business environment and a skilled workforce. Due purely to a rebound effect I wouldn’t be surprised to see Thailand grow at 5%+ next year because of all the above mentioned reasons.

As mentioned in a previous post, regardless of a tsunami, riots, politics, capital controls, airport shutdown, this wonderful silly country still somehow manages to grow. See below…

Source: http://www.factforthought.com/premium/1-01-gdp-growth-consensus-projections/

Ake thanks again for this, much appreciated.

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