Bangkok--26 Mar--HSBC Thailand
New HSBC survey reveals Thailand as top 3 markets with the most positive outlook
Increase in consumer demand ranks first in driving trade growth
Exchange rate volatility is the most challenge to access trade finance
Businesses in Thailand are highly optimistic about the future trade prospect. Demand for trade finance and its accessibility are projecting to grow, yet exchange rate volatility is the most concern in meeting trade finance needs, according to a new report from HSBC, 'Navigator: Now, next and how for business'.
Of the 200 Thai firms surveyed, the majority (92%) of businesses in Thailand are optimistic about their international business prospect and project the volume of trade to increase over the next 12 months. This is above the global average (77%) with Thailand being projected as the top 3 markets with the most positive outlook amongst markets surveyed, after Bangladesh and India.
Reasons behind this confidence include an increase in consumer demand for their products (33%), favourable economic environment (31%) and availability of skilled labour (25%) in driving growth.
China is currently Thailand's top trading partners (39%), followed by Japan (25%), and USA (16%). Thai firms continue looking to Japan and China partners to develop trade opportunities, but there is interest to expand more to Myanmar and Singapore.
In consistent with the projected volume of trade, over three-quarters (86%) of Thai businesses project a growing need for trade finance and a similar number (88%) expects the accessibility of trade finance to increase. Yet, exchange rate volatility (34%) ranks the most challenge to meeting their trade finance need, whilst the high transaction costs (24%) seems to be less a severe challenge in Thailand amongst markets in Asia Pacific, average 37%.
Focusing on the impact of government policies, those designed to strengthen regional ties such as China's 'Belt and Road Initiatives' and ASEAN 2025 strategy were mostly cited as having positive impact on international business. Additionally, both ASEAN and SAFTA trade agreements are also considered to be helpful.
Krisda Phatcharoen, Head of Commercial Banking, HSBC Thailand said "We see a robust trade prospect in 2018 and Thai firms can reap benefits from an upturn in consumer demand and improved economic conditions for their international business. As the leading international trade bank, HSBC is fully capable of providing them supply chain financing and facilitate their cross-border business."
The survey, conducted on behalf of HSBC by Kantar TNS, is compiled from responses by decision-makers at over 6,000 businesses – from small and mid-market to large corporations – across a broad range of industry sectors in 26 markets including Thailand. Economic analysis by Oxford Economics on behalf of HSBC supports the strength of business confidence, pointing to a 7% growth for global trade values in 2018 (goods and services combined).
HSBC Navigator: Now, next and how for business
HSBC Navigator is the most comprehensive report of global trade and business confidence. It combines an economic forecast of medium to long-term bilateral trade for exports/imports of goods and services across 25 markets (by Oxford Economics), and a global survey gauging business sentiment and expectations on trade activity and business growth in 26 markets (by Kantar TNS).
HSBC's Navigator helps businesses capitalise on new opportunities and make informed decisions for the future by understanding the outlook for international trade.
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