BANGKOK -- Thailand's business outlook is the weakest among the Association of Southeast Asian Nations as political instability still weighs on investor confidence, according to the latest survey by Grant Thornton, a global consultancy company.
The Thai economy had turned a corner since the first quarter of 2017 and registered an expansion of 3.9% in gross domestic product in 2017. But despite that, Grant Thornton's quarterly "International Business Report" showed that only 16% of local and global corporations were optimistic about Thailand's business outlook, compared with 98% for Indonesia, 74% for the Philippines, 34% for Singapore and 28% for Malaysia.
Nonetheless, the rate for Thailand had improved from 4% in second quarter of 2017, 8% in third quarter of 2017, 10% in the fourth quarter and 16% in the first quarter of 2018. Grant Thornton interviewed more than 10,000 companies globally for the report.
"The missing ingredient in Thailand is confidence," said said Ian Pascoe, chief executive of Grant Thornton. "The basic indicators have the country on the right track, but recent political crises have scared away some investors."
He said the military government has implemented a string of reforms to make it easier for foreign businesses to invest in Thailand. However, political instability and uncertainties over a long-promised election that would return Thailand to civilian rule remain major concerns for foreign investors, who are now taking "wait and see" approach.
Thailand is working hard to attract new foreign direct investment and Prime Minister Prayuth Chan-ocha is in Europe this week to promote the country. This follows a series of recent roadshows to encourage investment promotion in Thailand's Eastern Economic Corridor, a $43 billion flagship investment project to develop high-tech industries along the country's eastern seaboard and further inland.
Although the much-awaited general election was slated to held in February next year, Prayuth said on Tuesday that it will now not take place before the coronation of King Maha Vajiralongkorn Bodindradebayavarangkun, suggesting a further delay.
This will weigh on investor confidence, the Grant Thornton survey showed. Pascoe said that once the election date has been set, "the more of a surge we are likely to see among companies that bet on success."