The International Monetary Fund has predicted that Thailand's economic growth will range from 3 percent to 4 percent this year, and could reach 5 percent in 2000.
Such growth would confirm Thailand's recovery from the Asian economic crisis that it had caused two years ago when it floated its currency, the baht.
Ranjit Teja, chief of an IMF mission from Washington, made the prediction Friday after concluding a quarterly review of Thailand's performance under a $17.2 billion bailout package the IMF arranged in 1997 to reverse the crisis. Though the economy shrank 8 percent overall last year, Ranjit said a recovery had been settling in since the end of 1998.
Thailand has withdrawn about $14 billion in credit, and $500 million will become available by October, if needed. Thailand's foreign reserves stood at $31.9 billion as of Aug. 13. At the depths of the crisis, reserves fell to nearly zero from $25 billion.
The government has made gradual progress in restructuring the financial sector, though non-performing loans still account for a whopping 47 percent of total lending in the financial system.
Economic recovery so far has been driven by consumption and renewed growth in exports. Thailand's economic prospects are good, even if the U.S. economy begins to slow, Ranjit said. Southeast Asia and Japan are bigger export markets for Thailand than the United States. What is needed now, he said, are continuous efforts to restructure thousands of struggling companies and their debts.
But while daily change may seem tortuously slow, the officials said that the overall progress made by the government in implementing IMF-backed reforms has dramatically changed sentiment.
Reserves have been rebuilt, the baht stabilized, 56 failed finance companies liquidated, and six banks nationalized for merger and sale. Four state banks are to be sold by the end of the year to the highest bidders.