Thai coup poses little economic threat: ADB

Tokyo, October 4 :

The coup in Thailand poses little threat to the Southeast Asian economies although Thai growth is set to slow after large public works projects were shelved, the Asian Development Bank’s (ADB) chief economist, Ifzal Ali, said today.

“The Thai coup has been viewed by financial markets as an idiosyncratic and Thai-specific event,” said Ali, noting that the Thai baht and stock market had quickly bounced back after initial losses sparked by the putsch. “This is not likely to have spillovers into the region. This is not 1997,” he said, referring to the regional financial crisis almost a decade ago.

“This is a local political issue which hopefully will be sorted out within Thailand in the near future,” Ali said. Ali said there were mixed messages coming from Thailand, voicing concern about remarks from interim prime minister general Surayud Chulanont saying he wants to focus more on gross domestic happiness than GDP. At the same time the 63-year-old former army chief had appointed the central bank governor as one of his key advisers, which has had a calming effect on financial markets, Ali added.

Even before the Thai coup, however, the Manila-based ADB had sharply revised down its forecasts for economic growth there to 4.2 per cent from 4.7 per cent for this year and to four per cent from 5.5 per cent for next year, he noted.

Thailand’s economy has been suffering because of a long-running political stal-emate under the previous administration of former premier, who was ousted in the bloodless coup. Political uncertainty and postponement of large infrastructure projects in Thailand are expected to put the brakes on economic growth there but it ‘will bounce back’.