Sunday, December 02, 2007

World Bank reports on Thailand’s economy

Sources: Business Week: World Bank: East Asian growth robust; Bangkok Post: Thailand's economic growth lowest in region, World Bank says; China View: World Bank urges Thailand to enhance economy

The World Bank has requested the new Thai government to aggressively clarify its ambiguous state policies. The World Bank estimates Thailand’s economy is growing by 4.3% in 2007, the lowest in five years and also the lowest in the region. Thailand has suffered from waning investor confidence and a stagnant economy. The World Bank believes that private investment will greatly help Thailand’s economic recovery. The World Bank economist for Thailand stated that investors and the public are waiting to see indications of a clear direction regarding the new government’s policies which influence their confidence.

The World Bank believes that Thailand’s prospects in 2008 are better if the country can overcome its political uncertainties. Milan Bramhbhatt, author of the World Bank's East Asia Pacific Update, commented "Given that exports are going good, once the political questions are resolved, it is possible the economy could experience a sharp snapback and growth could improve quite significantly." In September 2006, Thailand experienced a military coup. Since then, it has been under an interim military-appointed government. The new government will be formed after the December general election and will likely be in place by February.

The World Bank estimated that East Asian economies are likely to remain healthy. East Asia’s economy was expected to grow 8.4% in 2007 and 8.2% in 2008. For example, the World Bank estimated that in 2007, Indonesia’s economic growth would reach 6.3%, Malaysia would reach 5.7%, the Philippines would reach 6.7%, Vietnam would reach 8.3% and China would reach 11.3%.

For discussion:
Are countries headed by military commands always subject to worldwide investment disfavor? If so, why?

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