Nissanke Weerasinghe, an adviser to the IMF's Asia and Pacific Department, said oil prices would be the IMF's key concern when it reviews the Thai economy again in the second half of next month.

The fund has forecast growth in Thailand's gross domestic product (GDP) of 5 per cent this year, and its prediction remains unchanged. While delays in the Thaksin government's mega-projects may affect overall investment, the degree of impact may not be significant, said Weerasinghe.

"Thailand in the post-crisis period has seen a change in the corporate balance sheet. Short-term debts have declined and overall economic fundamentals are stronger," he said. "The private sector in Thailand was quite resilient in 2005 despite the tsunami and a downturn in the electronics sector, and the economy has recovered. The private sector is still quite resilient and robust economic conditions continue."

He said the stronger value of the baht would not reduce trading competitiveness because the country's trading partners, particularly those in Asia, also see their currencies appreciating against the dollar.

The assistant director of the IMF's Asia-Pacific Department, Joshua Felman, said the overall economic outlook in Asia was good but there was a need to boost domestic demand. He said corporations had been reluctant to invest because of higher volatility as well as more risks, including a lack of investment guarantees from governments.

Therefore, Asian governments should maintain sound macroeconomic policies to reduce uncertainties, develop their financial sectors to promote the ability to transfer risks and improve the investment climate to reduce uncertainties and enhance returns.

The IMF forecasts GDP growth of 7 per cent in Asia this year - a consistent rate since 2004 - because of the low-interest-rate environment and the electronics-sector turnaround.

Jiwamol Kanoksilp

The Nation