Bangkok--22 Apr--Grant Thornton
The future looks bright for emerging economies according to the Grant Thornton International Business Report 2010. A balance of +57% of privately held businesses (PHBs) in 14 of the world's leading emerging markets indicated that they were optimistic about the prospects for their country's economy in the year ahead. At the same time, a balance of just +2 per cent of businesses in mature economies indicated that they were optimistic. These figures compare with a global average of +24 per cent
At an individual country level, emerging economies occupy four of the top five places in terms of optimism for the year ahead. Chile (+85% per cent), India (+84 per cent), Vietnam (+72 per cent) and Brazil (+71 per cent) are only separated by Australia (+79 per cent). Of the other emerging economies, Botswana, mainland China, South Africa, Malaysia and Poland all boast optimism balances of more than 40 per cent.
In the Grant Thornton emerging markets opportunity index (see figure 2) the top five countries this year remain the same as in the 2008. China leads the way thanks to its huge consumer market, increasingly open economy and trade growth, followed by the other developing Asian powerhouse, India. Russia, thanks to its wealth of natural resources, is third, followed by the two largest economies in Latin America - Mexico and Brazil.
Says Alex MacBeath, global leader - markets for Grant Thornton International, "The importance of the emerging markets to the world economy has been brought into sharper focus as the world emerges from recession. Not only have these economies been less severely hit, but they are also recovering more quickly, with growth rates over the next two years forecast to be double that of more mature economies."
Thailand, according to the Grant Thornton emerging markets opportunity index, offers the tenth greatest level of opportunity to investors. The country has fallen two places since the index was originally compiled but continues to be a strong exporter of rice, textiles and footwear, with rice being the most important export for the country.
Optimism levels fell by 33 per cent (to -63 per cent) amongst businesses in Thailand in 2009. However, business sentiment has rebounded strongly this year with a balance of +12 per cent being optimistic for the Thai economy over the next 12 months. This represents the sixth largest increase between 2009 and 2010 and takes optimism levels to their highest level since 2007.
Ian Pascoe, Managing Partner of Grant Thornton in Thailand pointed out: "Three major benefits that investors will gain when investing in Thailand are incentives, low cost of labour and land and low levels of security threats for foreign investors. Investors can receive exemption from import duty and corporate tax breaks. Cost of labour is still competitive in Thailand even though it may be cheaper in neighbouring countries. Moreover, the available infrastructure is far superior to that of other emerging markets, such as Vietnam, making it attractive for investors, businesses and employees."
However, the survey also reports that businesses in emerging markets fear their growth prospects are being hampered by poor access to finance and a lack of highly-skilled workers to a much larger extent than their counterparts in more mature economies.
Says Alex MacBeath, "The opportunity for investors from both mature and emerging markets to feed off this optimism and help these businesses to overcome the barriers they face regarding expansion are enormous. Indeed, these markets and their businesses are developing so rapidly and powerfully that ignoring them could represent a risk to long term profitability."
About the Grant Thornton International Business Report (IBR)
Grant Thornton IBR surveyed a sample of over 7,400 chief executive officers, managing directors, chariment or other senior executives in medium to large PHBs across 36 economies. The sample was randomly selected by number of employees or revenue of the businesses. A minimum sample size of 100 per country was surveyed in order to guarantee statistical reliability, although this number was higher in larger economies. The survey was commissioned by Grant Thornton International and conducted by an independent market research agency, Experian Business Strategies. Further details about the IBR methodology are available at: www.internationalbusinessreport.com.
About the Grant Thortnon emerging markets opportunity index
The Grant Thornton emerging markets opportunity index ranks the level of opportunity for invsetors in 27 emerging economies across the globe. Taking account of key factors such as size, wealth, involvement in world trade, growth potential and levels of human development, it highlights these markets as investment prospects with their large, rapidly expanding and increasingly affluent economies.
About Grant Thornton in Thailand:
Grant Thornton in Thailand is well recognized by the business community as one of the leading professional service firms in Thailand and has been in Thailand since 1991. We helped many clients successfully navigate the Asian economic crisis of the late 1990s, applying a mixture of techniques, including debt restructuring, cost cutting and business plan revision. We have also helped many clients realise acquisition and expansion opportunities. Our services include business consulting, external and internal auditing service, domestic and international tax planning, corporate finance advisory, restructuring and reorganization, merger and acquisition, executive recruitment, succession planning and remuneration planning. To learn more about our firm, please visit our web site: www.grantthornton.co.th.
Further enquiries, please contact:
Ian Pascoe Lakpilai Worasaphya
Managing Partner Senior Manager, Marketing and Communications
Grant Thornton Grant Thornton
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