Thailand

Set to enjoy another year of strong growth in 2013, Thailand’s economy is benefitting from the wider region’s rapid expansion and inflows of foreign capital. New investment will concentrate on upgrades to transport infrastructure, which will help further improve trade relations with its neighbours.

A major overhaul planned for Thailand’s agricultural sector next year will see the government roll out a zoning initiative as part of a two-pronged bid to optimise crop production and reduce expenditure on price-support schemes.

Financial markets in Thailand are experiencing rising levels of capital inflow, drawn by the economy’s solid performance and sustained political stability. However, there are concerns this flood of funding could cause overheating and create bubbles in some segments, including the stock and property markets.

With arrivals on the increase from both well-established and new markets, 2013 looks set to be another record-breaking year for Thailand’s tourism industry. However, while the sector’s size has earned the tourism industry a place on the global top-20 list, officials believe the country could still close the gap on its rivals by becoming more competitive in key areas.

With regional integration of the financial services industry drawing closer, analysts are warning Thailand’s banks to strengthen their position at home or risk being swallowed up by rivals once the Association of South-east Asian Nations (ASEAN) Economic Community is launched in 2015.

Economic growth, sound regulation and high levels of capitalisation should benefit the Thai insurance sector in 2013. Growing public understanding of the importance of insurance and government support for the industry should also aid expansion, though rising risk may impact estimates in the near term.