That point was driven home in a report released by Phatra Securities. It said the great achievements of the Anand Panyarachun government - which was formed following the 1991 coup - and the booming economy during the Thaksin Shinawatra era would lead to great expectations from the new government being led by interim PM Surayud Chulanont.

"We argue that probably most people will instinctively use their memories of the Anand government's many achievements as the benchmark for the next government," said the securities house. "Also, the Thaksin government was able to revive the economy from 2 per cent growth in 2001 to 5-6 per cent despite Sars, the tsunami, the Iraqi War and oil at US$70 (Bt2,600) per barrel.

This means the benchmark for the new government is set relatively high.

"On the whole, we conclude the new government will face some economic head winds in the form of high expectations from the public, based on the achievements of the Anand and Thaksin governments."

Phatra Securities said that when the Anand government was formed in March 1991, economic expectations were relatively low. Most Thais at that time knew little about Anand and his Cabinet of technocrats. To be sure, the report said, the economic situation was dire. Thailand was in the middle of an asset bubble, and the current-account deficit was 8.5 per cent of 1990 gross domestic product (GDP).

However, the Anand government acquitted itself well, bringing the Thai economy down to a soft landing with a current-account deficit falling to 5.7 per cent of GDP in 1992 and 5.1 per cent in 1993.

In many ways, the securities house said, the Anand government exceeded expectations with numerous domestic economic reforms, including making Thailand the driving force in Asean economic liberalisation, no mean feat given the state of the Thai and global economies.

On the other hand, it could be argued that the worrying external situation arising from the current Persian Gulf crisis has helped unite Thais, making them more eager than they would be otherwise to support strong leadership and a good economic team, even if democratic principles were compromised.

Phatra said the Thai economy was currently on strong ground and could look forward to falling inflation and interest rates, modest current-account surpluses and a stimulative fiscal policy that could be "appropriately accommodated" by the Bank of Thailand.

However, while uncertainty is likely to decline in the coming months and confidence set to improve, the securities house declined to upgrade its growth forecast for the country.

"We believe the economic slowdown will continue and bottom out around the first quarter of next year. GDP growth of about 3 per cent will be possible. We reckon lower oil prices, which will help lower inflation and move the current account into a surplus during this year's second half, will pave the way for interest rate cuts in 2007," it said.

"Combined with a stimulative fiscal policy - with an expected 2007 budget deficit of Bt100 billion - and a return to democracy by the end of 2007, we are forecasting GDP growth in the 5-per-

cent range during the second half [of

next year]."