The Thailand economy got off to a scintillating start, with 1st quarter growth up six percent on the same period last year, and up 5.7% on the last quarter of 2007. After two years of political turmoil culminating in a coup last year, it seems the new government is finally settling in, and has made economic growth its top priority. The main course of its efforts are centered on generating internal and regional investment, with global investment currently slowing.

In March the finance ministry said government efforts would push private investment up to 9.7% from 0.5% last year, and that private consumption should grow to 4% this year from 1.4% last year. The finance ministry predicted six percent growth in the 1st quarter of 2008 and its predictions were right on the money, but for those who need a little more convincing the Institute of International Finance (IIF) said growth would accelerate in Thailand this year, as growing exports to non-U.S. countries off-set falling demand from the States.

The IIF predicted Thai GDP growth would expand to 6% from 4.8% last year. The IIF also said that rising inflation caused by the rising cost of basic materials was the biggest challenge facing Asian economies, but in a refreshing statement it said that the problem would subside shortly and that worry over the problem had been greatly exaggerated.

The two reports are good news for investors who are looking to Asia, as it is seen as having the best chance of weathering the global storm, a sentiment again backed up by the IIF; “The leading emerging markets in Asia are well-positioned to weather uncertain and less favorable global conditions,” were its exact words. Liam Bailey head of international research had this to say:

“Continued growth in Asia is excellent news for property investment in Thailand, especially in the emerging markets of Thailand’s islands of Koh Samui and Koh Phangan, where growth is primarily fueled by spiraling regional tourism. Property prices in Koh Samui, an island with more five and six star resorts than any other in the world, grew by 50% per year, in 2006 and 2007. Continuing growth in Asia will see tourism growth continue and capital appreciation stay at similar figures. Koh Phangan is the new kid on the block, and luxury resort property there is just as hot for investment, growth figures are unclear as it is a really new market, but with Phuket and Samui as comparisons growth will not be any less than 25% per year, and could hit 50% in 2010.”

Popularity: 1% [?]