Thailand: Business Confidence And FDI Returning To Post-Coup Thailand

Last Updated: 16 October 2014
Article by Nitin Modi

Business confidence is returning, and so are the foreign investors. Add that to the strong rebound of the Thai stock market (SET) and its current political stability, Thailand seems to be on track for a strong recovery, says our local expert.

A lot has happened in Thailand since the  military coup d'état in May. A new cabinet was formed shortly after the election of General Prayuth Chan-ocha (the former Commander in Chief of the Royal Thai Army) as Prime Minister. As the aftermath of the six months political unrest starts to wear off, investors' confidence seems to be returning. Thailand's economy has successfully avoided a recession in the second quarter and it is now showing signs of recovery.

Southeast Asia's second largest economy grew 0.9% in April-June from the previous quarter as government spending and exports improved. Year-on-year, Thailand grew 0.4% in the second quarter but a contraction of 0.1% in the first six months was inevitable due to the political turmoil that damaged domestic consumption, investor confidence and the tourism industry.

Thailand's central bank is keeping its 2014 economic growth forecast unchanged as it anticipates a significant improvement in the local economy in the last quarter. This is because the Thai government is expected to announce an economic stimulus package that includes a US$74bn infrastructure investment plan and government budget disbursement to stimulate domestic consumption and public spending. The central bank expects a strong V-shaped rebound from the country's recent rough patch while predicting a growth of 4.8% in 2015.

On the stock market, the Stock Exchange of Thailand Index (SETI) is trading at a 14-month high, having jumped 10% since the military takeover. Overall, the sentiment has become far more conducive to a rise in funds as investor confidence is slowly restored. The stock exchange is experiencing a wave of initial public offerings (IPOs), with the listing of Thailand's first  real estate investment trust (REIT) by Bangkok Land and Bangkok Airways coming in October. In total, 13 firms and four property funds have entered the final stages of listing and are now negotiating with the authority on the listing dates. The swift recovery of Thailand's capital market can further be illustrated by more than 30 companies, property funds, infrastructure fund and REIT which have all filed for IPO approvals.

Since June, Thailand's Board of Investments (BoI) has approved 121 projects worth US$9.39bn ranging from energy production (steam, wind, ethanol and electrical power) to auto-parts and fabric production. Also, for the first nine months of the year, the Business Development Department (under the Ministry of Commerce) has approved 313 applications worth more than US$1.79bn under the Foreign Business Act that allows foreign investors to  set up their Thai operation. The objective of the act is to encourage knowledge transfer by opening up the services industry (particularly the finance sector) to foreign firms that will eventually create more jobs for locals. The numbers of approval have increased 11% while the value of initial capital investment is US$1.36bn more than the same corresponding period in 2013.

The figures indicate that foreign investors are buying into the Thai economy recovery story as political stability has been restored by the military. The Thai government's effort in restoring foreign investors' confidence has begun to bear fruits as Volkswagen is planning to invest US$1.27bn to build its first manufacturing plant in Thailand, capitalising on the tax break policies that had already attracted investments from Ford and General Motors.

Thailand's economy is well known for its ability to withstand domestic political turmoil, global economic crisis and even natural disasters - thus earning the moniker "Teflon Thailand". Despite the devastating tsunami (2004), military coup (2006), global financial crisis (2008), political unrest (2010) and severe flood (2011) of the past decade, Thailand's GDP grew at an average rate of 4.2% in the same corresponding period. Thailand's ability to rebound swiftly without fail is largely due to its sound macroeconomic management, stable banking system and strong economic fundamentals.

According to the Global Competitiveness Report 2014-2015 (World Economic Forum, 2014), Thailand is ranked 31st globally (which is up six places on 2013's list) and third among ASEAN countries. Thailand's consistent improvement in competiveness (third year in a row) has proven that its fundamentals are still intact, and it's ready to move towards becoming a high-income economy.

In short, with the return of confidence from the business community and FDI returning back to Thailand - coupled with the strong rebound of the Thai stock market (SET) and current political stability - Thailand seems to be on track for a strong recovery.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
3 Oct 2019, Webinar, Rotterdam, Netherlands

To view this Webinar in full click here

 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions