Atradius Report on Thailand Looks at Credit Risk for 2020/21

Trade credit insurer Atradius has published a new country report on Thailand.

The new report forecasts a sharp economic slowdown for Thailand in 2020 with GDP expected to shrink by more than 5%. However, the future outlook currently signals a potential rebound next year.

According to Atradius, going into 2020, Thailand’s economy was already showing signs of weakness during 2019 with GDP growth decreasing to 2.4%. While household consumption remained robust, growth in fixed investment slowed and industrial production and exports contracted by 3.8% and 2.6% respectively, weighed down by sluggish global trade, US-China trade tensions and the strength of local currency, the Thai baht.

The report, published on the Atradius website publication pages, indicates that the Covid-19 pandemic has led to a severe contraction in economic activity. Exports, predominantly electronics and automotive, are forecast to fall by more than 15% this year, hit by supply chain disruption and deteriorating external demand. Meanwhile, industrial production is expected to decrease by more than 10%, with automotive and electronics sectors value added forecast to contract 12% each.

Covid-19 containment measures and the consequent disruption to tourism has hit domestic demand; private consumption is forecast to shrink by about 5% with rising unemployment and high household debt limiting additional spending.

Despite the drop in GDP expected for 2020, Atradius forecasts that Thailand’s economy will rebound by about 7% in 2021 – subject to the assumption that the Covid-19 pandemic will be contained this year allowing the global economy to begin to recover.

The risks to the long-term recovery include a GDP growth rate which is lower than neighbouring economies, high household debt and a decrease in market competitiveness due to higher wage levels compared to a number of other markets. In addition, the share of the working-age population is forecast to decrease from 65% in 2020 to 56% by 2040, which is likely to impact economic growth in the long term.

N.B. – The country report is based on the available current information prior to its publication. In a rapidly changing commercial and economic environment, the data is subject to change and the content will be reassessed by economists, and updated where appropriate on an ongoing basis.

About alastair walker (3725 Articles)
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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