Thailand's tumultuous political scene hogged the headlines in 2010 as parts of Bangkok descended into violence during two months of anti-government demonstrations. But the chaos on the streets did not prevent a strong rebound in the Thai economy, led by a sharp upturn in exports and government spending. The economic recovery translated into robust returns for banks and has put the financial sector on a stronger footing for 2011, an election year in Thailand.
The International Monetary Fund estimates that Thailand's fiscal consolidation in 2011 will cut its gross domestic product (GDP) by 1%. The Thai economy remains highly dependent on global demand, as exports of goods and services account for about 65% of GDP. The Bank of Thailand forecasts that overall growth, which may have reached 8% last year, will fall back to between 3% and 5%. As the government scales back stimulus spending, bankers expect increased private consumption to take up the slack as confidence returns.
