Thailand's military coup could prove a circuit-breaker, says ANZ

BANGKOK - Though the headlines will certainly be negative, the military coup brings Thailand’s seven month political stalemate closer to resolution, according to a research note by ANZ Bank, which says Thailand is now approaching the end game in its current political crisis. The coup could well prove to be the circuit breaker that allows a return to political normalisation and ultimately allows fiscal policy to become operational again, ANZ says.

“Though we have revised down our full-year forecast to just 1.3% for 2014, it is important to note that, at this time, events may appear to be closer to resolution than at any other time in the past seven months,” ANZ says. “Indeed, notwithstanding the near-term knee jerk reaction, positive sentiment could return strongly for Thailand, sooner than expected.
“A coup brings a functional Government and an effective stimulatory fiscal policy which is desperately needed that much closer. Furthermore, in the background with the political and economic noise, a less observed factor has been the dramatic improvement in Thailand’s current account position.
“Though the risk-on assessment of Thailand has been a seven-month slow-burn, its resolution could prove to be faster.” www.live.anz.com (ATI).