Installed last year after a military coup in September, Thailand’s interim government is limping to the end of its term, shaken by resignations, a weak economy and declining business confidence. Prime minister Surayud Chulanont, a former army commander, is due to hand over power early next year after parliamentary elections on December 23 that are predicted to produce a coalition government.
Amid the upheaval, Thailand’s gross domestic product (GDP) is expected to grow this year by about 4%, down from 5% in 2006, led by exports. Analysts say a modest second-half recovery in domestic demand, helped by a series of rate cuts by the Bank of Thailand, has put the economy on a firmer footing in 2008, when companies might be ready to jump-start capital expenditure on the back of government spending on long-delayed infrastructure projects.