• The World Bank predicts that Thailand’s gross domestic product will grow 6.1 percent in 2010, slightly below its previous forecast of 6.2 percent.
               
• The Thai economy runs on a single engine: external demand. The engine is doing well, however, and robust export recovery is leading to a strong recovery.
                 
• As a result, the impact of the political turmoil on Thai GDP is modest. However, the large number of workers in sectors affected by the crisis suggests that the social impact of the crisis will be larger than the impact on GDP.
                 
• The overall long-term impact of the political crisis remains uncertain and will depend on political developments in the coming months.
                 
• Because exports will still be the main driver of economic growth in the near term, the external environment and the outlook for expert performance will remain the critical variable to Thailand’s GDP outlook.
                     
• Fortunately, Thailand’s balance sheets remain strong: public debt is at manageable level, foreign reserves are high, and Thai firms as well as commercial banks are financially healthy.
                   
• Going forward, however, Thailand needs to strengthen the foundation for sustained and shared growth. This will require finding an engine of shared growth that brings more Thai workers into dynamic and productive sectors of the economy.
                      
• Investing in education could be key. Starting a second engine means performing more higher-value added tasks in Thailand. This will require a higher supply of skills, which can be achieved through better and more accessible education.

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Contacts:
In Thailand:
Pichaya Fitts
(+66-2) 686-8324
Pfitts@worldbank.org 

In Washington DC:
Elisabeth Mealey
(+1-202) 458-4475
Emealey@worldbank.org