A decade after the 1997 Asian financial crisis, Thailand's economy looks strong with robust fundamentals, the International Monetary Fund said Saturday. "Recent economic activity has moderated, but Thailand's macroeconomic fundamentals-a current account surplus, a sustainable fiscal position and low inflation-remain strong," IMF chief Rodrigo Rato told a news conference in Bangkok.
"We expect consumer and business confidence to strengthen and support domestic demand once elections take place at the end of this year," Rato said, adding a recent capital influx would unlikely bring another crisis.
Thailand's military-installed government, which came to power after last year's coup, has promised to hold elections later this year, following an August referendum to approve an army-backed constitution.
Rato said he had discussed recent financial volatilities with top officials here as the Thai bourse fell by more than two percent Friday with the baht at 10-year highs against the dollar due to large money inflows.
The kingdom had capital inflows worth more than one billion dollars in July alone, the finance ministry said, adding that coping with volatile money inflows was among Thailand's major economic challenges. But Rato said the recent money influx would unlikely bring a fresh crisis to Thailand due to the country's strong economic fundamentals, including robust exports. "I don't think that right now Thailand or Southeast Asia have any reason to expect any crisis," the IMF chief said.
"Volatility is a problem, but it doesn't necessarily have to bring us to a crisis," he said. In the wake of the 1997 meltdown, which started after Thailand was forced to float the baht, the IMF arranged a 17-billion-dollar rescue loan for the kingdom to avoid default.
While post-coup political uncertainty continued to pressure the Thai economy, the central bank on Friday slightly revised up its growth forecast this year to 4.0-5.0 percent from 3.8-4.8 percent, amid hopes for a consumer spending recovery.