Thailand's economic prospects for the New Year will turn on the successful handover of power by the country's present military leaders to a democratically elected government that pursues a sound economic growth strategy, analysts say.
'The outlook for 2008 assumes that national elections are held in December this year as planned and that an elected government pursues a credible economic programme,' notes the Asian Development Bank (ADB) in its Asian Development Outlook 2007 Update.
'If that is the case, consumer and business confidence would likely revive. Private investment would pick up, supported by the reduction in interest rates this year and fairly high capacity utilisation.'
The ADB endorsement is partly echoed by the International Monetary Fund (IMF) which notes that Thailand is the exception to continued strong consumption growth among the Asean Five (Indonesia, Malaysia, the Philippines, Thailand, and Vietnam) since 'political developments continue to weigh on confidence'.
But assuming the cloud lifts after the election, Thailand, the laggard, may be in for an investment boost, it adds.
In its Regional Economic Outlook, published in October, the IMF says its baseline scenario for Asia features a modest reduction in growth in 2008, in response to policy tightening in the major emerging markets in the region and a slowdown in foreign demand.
