BMI View: Although Thailand's domestic landscape remains wrought with fragility, owing primarily to thepolitical weight that the military holds, but also to ongoing domestic and regional security concerns,Thailand's defence market and expenditure will continue to be one of the fastest growing in the world. Thelocal defence industry remains underdeveloped and, as such, the country will rely on internationalexporters to satisfy the majority of its defence requirements - though the government has made some initial,but concrete steps forward in bringing up indigenous development capabilities. Cooling relations with theUS in light of the 2014 coup have allowed for greater diversification in Thailand's defence trade matrix andwe highlight that non-US firms are increasingly well-placed to capture market share. We highlight gaps inthe Royal Thai Armed Forces' C4ISR, amphibious and naval capabilities to especially offer lucrativerevenue-earning opportunities for multinationals. Nonetheless, the political landscape remains fragile andthis means a continued threat to defence spending policy. The opaque nature of procurement and defencespending will also act as deterring factors. Deteriorating demographic trends and a lack of reformmomentum will also act to hinder potential in economic growth and, in turn, that of defence expendituregrowth.
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