0		Thailand:, Political, Risk

Foreign investors are wading back into Thailand despite a three-year political crisis, stoking stock and currency gains, but economists say political unrest will limit how fast and how far Thailand pulls out of recession.

The extent of damage to the broader economy depends on how long fugitive former Thai Prime Minister Thaksin Shinawatra challenges Prime Minister Abhisit Vejjajiva, and whether his campaign backed by thousands of red-shirted street protesters undermines the confidence of investors and consumers.

"It can be a source of concern ahead," said Euben Paracuelles, an economist at the Royal Bank of Scotland. "Our clients are starting to ask again about politics."

So far this year, the market toll from political unrest is minimal. The baht has gained 2.32 percent against the dollar, the second-best performer among Asian currencies after Indonesia's rupiah. The benchmark stock index is up 42.3 percent, turning around from a 47.6 percent fall last year......

And in what some see as a vote of foreign confidence, Thailand received net foreign direct investment of $25.2 billion in three years to 2008, lower only than Singapore's $35.3 billion and far more than Indonesia's $6.5 billion and the Philippines' $3.5 billion, according to data compiled by HSBC.