BANGKOK Thailand's prime minister said on Wednesday his Democrat Party would have the edge in a mid-year election but he would probably need to form a coalition to govern, signaling a close and potentially volatile poll.
In an interview with Reuters, 46-year-old, Oxford University-educated Abhisit Vejjajiva said he expected the election to bring stability to the troubled country, regardless of who wins, and an alliance with smaller parties would probably pave the way for him to form a government.
"We are looking at some time around the first half of this year," Abhisit said of the election, his firmest indication yet of the timing for a poll. "It is a close election like last time, except that we are slightly ahead. The latest polls show we are ahead in all polls except the northeast."
Abhisit's conditions for an early election include peace and stability in a country racked by bloody anti-government protests last year in which 91 people died, plus economic recovery.
Finance Minister Korn Chatikavanij told Reuters in a separate interview the Thai economy was in good shape and he expected growth of between 4 and 4.5 percent this year.
"We have a lot of room for maneuver. Domestic demand is good, exports remain robust, " he said. "Inflation is the key and hopefully the inflation scenario isn't going to need the Bank of Thailand to increase rates beyond what we are expecting."
Korn said Thailand's political climate had improved considerably and that people would now be able to "exercise their frustrations in a controlled manner."
The leader of the anti-government "red shirts," whose protests helped send the economy into a mild recession in the middle of last year, signaled a softer stance, saying they would respect the result of the election, providing it was fair.
Thida Tojirakarn, acting chairwoman of the group, told Reuters she saw no need for prolonged protests such as the 10-week occupation of parts of Bangkok last year, following the release on bail of red shirt leaders held on terrorism charges.
"This is not the time for a protracted protest ... The reasons for a long protest are fewer. If the leaders hadn't been released, the atmosphere would be very different," she said.
Thailand's three previous elections were dominated by parties allied with fugitive former premier Thaksin Shinawatra, the red shirts' figurehead, who was ousted in a 2006 coup but remains popular in the north and northeast.
Many had expected the latest pro-Thaksin party, Puea Thai, to win the next election, but with the party in disarray, its victory seems less certain and changes in electoral laws could be a boon for smaller parties.
Abhisit said he was confident his Democrat Party could retain most of its seats and make inroads into Thaksin's traditional northeast support base. However, he accepted he might need the help of smaller parties to govern again.
"A coalition government is the likeliest scenario," he added.
Thida, whose husband Weng Tojirakarn was one of the leaders released on Tuesday, said the red shirts would not endorse a particular party, but its mostly working class supporters would probably vote for Puea Thai because of their loyalty to Thaksin.
But if the polls were fair, the red shirts would respect the result, she said.
"We will accept any party. If the Democrats win, we will accept. But we will fight against a coup or if there is something unfair," she said, threatening more protests if there were blatant signs of political interference by the military.
The red shirts still plan to hold more big rallies to push for the release of more than 100 jailed protesters. They also want to know who was responsible for the deaths of their comrades when the military was deployed to evict them from two sites in Bangkok last year.
A state probe into the violence, Thailand's worst in decades, has been largely inconclusive. The red shirts believe troops were ordered to shoot demonstrators. They have petitioned the International Criminal Court to carry out a probe, fearing a "whitewash" by Abhisit's government.
Abhisit denied that troops opened fire on unarmed civilians and said he wanted the state investigation to be concluded fast.
"At no point did we send in soldiers or police to use firearms against peaceful protesters," he said.
"Buildings were set on fire and soldiers and police had to protect the fire engines," he added. "Whether those orders were executed without errors is something we need to investigate."
(Additional reporting by Ambika Ahuja; Writing by Martin Petty; Editing by Alan Raybould)