Thailand should see a sharp rebound of 4% growth next year following a 4% contraction in 2009, according to Peter Redward, managing director and head of emerging Asia research for Barclays Capital.

"For Thailand, the recession has ended," he said. "The economy is recovering, exports are already reviving and private consumption and spending will continue to grow."

But slow private investment, structural weaknesses and future inflation concerns could weigh on the Thai recovery.

While some sectors are likely to recover quickly, there remains relatively low impetus for companies to invest.

The government's second stimulus programme, committing 1.45 trillion baht in new investment through 2012, was "highly appropriate" for the country, he said.

Much of Thailand's investment has gone into machinery, and new measures are needed to help bring manufacturing capacity on line.

Inflation meanwhile could jump to as high as 4% in 2010, driven by a rebound in commodities prices rather than underlying demand.

Mr Redward said fiscal stimulus is unlikely to create inflationary pressure, and expected inflation to ease to around 2% by mid-2010. "The key is for the government to get the private sector investing again."

Asia should continue to lead globally in terms of growth.

Second-quarter data for the region showed extremely strong gains, led by countries with high exports and short production chains such as Korea, Taiwan, Singapore and China.

Thailand, Malaysia and India, with their longer production chains, would see a more gradual recovery, hed said.

Domestic demand will be the key driver for growth in the region over the next 12 months, with stimulus packages to help "amplify the economic cycle," and the greatest impact coming later this year and in early 2010.

Mr Redward said Asia-Pacific, including Japan and Australia, is already estimated to be larger than the US economy. By 2022, China, which is leading global growth, should overtake the US economy alone in terms of size.

In 2000, emerging Asia's nominal GDP was estimated at US$3.3 trillion, or roughly one-third the size of the US.

"Today, we estimate that the nominal value of Asian GDP is US$8.7 trillion, or 63% the size of the US. If including Japan and Australia in the wider Asia-Pacific economic region, the Asia-Pacific is already larger than the US," he said.

China will only continue to grow in the future, reaching 52% of regional GDP by 2019 compared with 32% today and 14% in 2000, Mr Redward said.

The country's emergence has been driven by rapid urbanisation, high savings and investment rates, rapid import of technology and high exposure to international trade. But China's ability to maintain rapid growth will be constrained in the future, due to slowing population growth and an aging population.

"But these longer-term growth constraints are unlikely to have a significant effect on the economy over the next decade, and the country will still likely produce trend growth rates of 8-10% per year," Mr Redward added.