• 
• See all for Emerging Money
• View Print Version

• Emerging Money
• Emerging Money Asia
• Emerging Money Countries

The Bank of Thailand issued a statement this week on the health of the Thai economy ( THD , quote ). While the Southeast Asian nation is poised to outgrow many of its peers, external factors remain a potential detriment going forward.

The Thai economy has performed admirably since disastrous floods disrupted the country's export sector last year. Since then massive capital expenditures by the government have powered Thailand through the financial crisis.

However, like with South Korea ( EWY , quote ), weak external demand may start to take a toll on the economy. As the Bank of Thailand indicated this week, second and third quarter growth will remain stable, but a return to strong growth won't likely occur until the fourth quarter this year.

That said, downward revisions by the Bank of Thailand may indicate the worst is not yet over. With second quarter numbers due out in a few weeks, it remains to be seen if they will belie increased weakness in the Thai economy. Some also fear a liquidity crisis could materialize, although that would require a much steeper downturn in the global economy.

Evidently external factors are increasingly putting more pressure on the Thai economy, whereas before domestic spending was sufficient. The Bank of Thailand explicitly warned of weakening developed world and Chinese demand as potential hurdles for the Thai economy over the next few months.

According to Bank of Thailand assistant governor Paiboon Kittisrikangwan , "(t)he euro-zone debt crisis has had a wider impact than expected and the crisis is likely to drag on... We still don't see any light at the end of the tunnel for the European crisis."

Investors should keep their eye out for upcoming developments in Thailand. Those with a long-term time horizon could consider going long THD on the back of any significant downward pressure.

Related International Articles

• 
  When fed hikes S&P 500 goes up!
  5/23/2013 09:00 AM
• 
  Aussie dollar slides how far can it fall?
  5/23/2013 08:39 AM
• 
  Update – “Mothers Index”
  5/23/2013 07:52 AM