Thailand's economy grew in the fourth quarter at its fastest pace in more than two years, spurred mainly by exports, a stronger-than-expected result that prompted the state planning agency to boost its 2008 forecast.
Still, analysts expect growth to ease in 2008 compared with 2007 as Thailand feels the impact of a slow down in the U.S. economy even though the government has promised a series of policies it hopes will boost economic activity.
Thailand registered seasonally adjusted fourth-quarter growth of 1.8 percent, above expectations for 1.5 percent, the latest Asian country after Japan and the Philippines to post strong economic figures for the period.
"The effect of a U.S. and global economic slowdown should become more evident from the second quarter at the earliest, which means the domestic economy will rely mainly on domestic demand in 2008," Aksarapak Wongcharoen, an economist at Tisco Securities said.
"All of this should also depend on how fast a new government implements its economic policies," she said.
The report from the National Economic and Social Development Board (NESDB), state planning agency, increase the proportion of domestic, but the baht, trading near 10 - year high, unchanged.
Thailand's new government has made the lifting of controls and revive the economy a priority since coming to power after elections in December, that the restoration of civilian rule.
He unveiled a series of populist measures to stimulate consumer spending, pledged to speed up the multi-billion dollar infrastructure projects, and called for lower interest rates.
Private sector economists polled last week by Reuters in Thailand forecast economic growth would slow further in 2008 to 4.6 per cent, while the state planning agency opens the possibility of a pick up in the momentum.
It forecasts gross domestic product in 2008 will grow by 4.5 per cent and 5.5 per cent, half a percentage point above its last forecast in December.
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