The newly elected Government is now in place to focus on reviving the country’s economy and implement new public infrastructure investments. However some degree of political uncertainty remains - with renewed protests against the Government’s plans to structurally amend the 2007 Constitution as well as against its alleged hidden agenda, as a supposed ‘TRT party nominee’, in proposing various policies aimed at possibly helping to restore ex-PM Thaksin’s political standing after his return to Thailand earlier in the year. This casts a continuing shadow of doubt on the perceived long term stability of the new Government and its real ability to revive both Thailand’s economic growth and ongoing democratic development.

Further, the new Government has been buffeted by the growing negative global financial problems as well as continued spiking in crude oil prices, resulting in increased economic uncertainties and seemingly uncontrollable inflationary pressures (with CPI at 4.5% in Q4/07 but increasing to 6% in Q1/08) on the basic costs of living for the general consumer, which will clearly dampen the renewed consumer sentiments that was apparent in Q4/07.

Thus, despite the significant actual Q4/07 GDP growth of 5.8%YoY and the 4.8%YoY for FY/2007 as well as the continued improved trends seen during Q1/08, the ongoing uncertain political situation and renewed economic concerns will now have a negative impact for actual Q2/08 and projected FY/08 GDP growth – now expected at 4.5 – 5.0%, compared to previously higher est/act 6% growth achieved in late 2007.

According to the Tourism Authority of Thailand (TAT), subsequent to the 5% YoY increase in international tourist arrivals for FY/2007 (at 14.8 million vs targeted 15.0 million), arrivals continue to show some solid growth during Q1/08 - due especially to continued uptrend in demand for the key Andaman resort destinations after fully recovering from the tsunami tragedy.

However, the continuing negative impacts resulting from global financial slowdown together with the sustained increasing fuel prices and unsettled local political environment are seen to be potential threats to the upbeat trends in the tourism industry. For FY/2008, the TAT is aggressively targeting total international tourists arrivals of 15.7 -16.0 million (UP by approximately 6 – 7%YoY) as well as an ambitious target of over 90 million domestic travelers – with actual/estimated Q1/08 international arrivals showing a 12 - 13% YoY growth.