SINCE economists have been trying to figure what South-East Asia’s second-biggest economy will do next. The data show that this year there will be hardly any growth at all. Spending is weak, investment down, trade and tourism shrinking. A drought is looming in the provinces and in Bangkok easy money has pushed the bourse nearly to an all-time-high. The optimists note that the coup has restored peace and order and things are already looking up. The pessimists see nothing but problems: a collapse in domestic demand, martial law, crippling uncertainty—about the army’s ability to run the economy, among other things—and an imminent royal succession.
How much will Thailand’s indebted households choose to spend against this background of artificial stability and longer-term uncertainty? TMB Bank plc, formerly known as Thai Military Bank, reckons the moment Thais will confidently dip into their spending money is just around the corner and that it will produce a “V-shaped” recovery. Economists at Siam Commercial Bank, the royal family’s bank and bankers, also see a nice pick-up around the corner, with the economy returning to its potential of around 4.5% in 2015. And the Bank of Thailand, the central bank, agrees that things will soon improve. Everybody hopes they are right.
Ask economists at the World Bank (which stopped lending to Thailand long ago because the country had become too rich) and the answer is different. This week, in the bank’s luxe 30th-floor offices overlooking Bangkok, they told reporters that Thailand would remain the slowest-growing economy in South-East Asia till 2016 (see