Although Thailand’s Deputy Prime Minister Suthep Thaugsuban has played down speculation about a possible dissolution of the House in the short term, the recent announcement of an important populist schemes might indicate otherwise. Thailand Business News
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Thailand’s ruling party braces for key election in 2011
A severe drought and a decline in rice prices in early 2010 do not bode well for agricultural production and consumption, although increased employment in manufacturing will partly offset the impact to agriculture.
However, the upside is limited due to political and regulatory uncertainty, including from possible political violence and the Map Ta Phut court case. The government investment plan is proceeding at a slow pace, but public investment should contribute to growth.
In any case, Thailand’s strong rally in 2009 should still be considered in context.
Low market valuations represent a problem on the demand side as well. Despite efforts to educate the public about the capital market, Thailand’s investor base remains small with only about 500,000 accounts in the securities sector out of a population of 67 million.