Thailand still among top choices but outlook dim

Written by changthai11 on Friday, October 10th, 2008

INVESTMENT

NAREERAT WIRIYAPONG

Thailand has remained an attractive destination for foreign businesses, ranking eighth in the world, but prolonged political tensions may further erode investor confidence both in capital markets and the real sector, a global survey says.

Grant Thornton’s International Business Report 2008, which explored views of 7,800 privately owned businesses across the world, also found that Thai business leaders reported the highest levels of constraints on business growth out of the 34 economies surveyed in the first half of this year.

Compared to its neighbours, Thailand appears to have a relatively poor outlook. Overall market sentiment has been dampened by negative factors led by renewed political concerns, fears of another coup and an uncertain economic direction amid global financial crisis, according to the report, which was compiled in the first half of the year.

“Thai business leaders reported low optimism, ranking only after Ireland in this year’s survey,” said Peter Walker, senior partner with Grant Thornton in Thailand, who led the survey in which 300 Thai businesses took part.

However, Thailand’s ranking as one of the most attractive destinations in the world has remained unchanged from last year’s report.

Thailand is now the eighth most attractive emerging market for investment in the world, on par with Malaysia and Indonesia and ahead of Vietnam and the Philippines.

Thailand continues to be an attractive destination for investors looking to develop manufacturing and service-sector activities in Asia, he added.

But given the tough global economic conditions, Mr Walker noted that Thailand had to seek the way out of the domestic political turmoil quickly.

“Nobody knows how bad the global economy is but clearly it is not easy to fix quickly,” said Mr Walker.

Thai political leaders should put aside their power squabbles and work together to manage the country to get through difficult global economic conditions, he stated.

“Thailand needs to grow foreign direct investments to drive the economy and boost exports to bring back the confidence,” Mr Walker said.