Thailand is the only one of these seven economies which is likely to grow faster this year than last. Consumers are still wary, but business investment has picked up during the smooth return to civilian rule. The abandonment of capital controls should further strengthen confidence. Nonetheless, by boosting the currency, it also adds to pressure on the central bank to cut interest rates further. We expect Thai rates to fall by at least 100 basis points by the middle of the year, with even bigger cuts likely if the Fed continues to lower US rates aggressively.
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