TOKYO (Reuters) - Thailand's finance minister said he has not seen foreign investors leaving the country despite recent political unrest, but acknowledged it would be natural for them to reconsider their investment destination or delay their plans.
But Finance Minister Korn Chatikavanij stressed that Thailand was committed to making efforts to win back investor confidence.
Korn, who expects firm economic growth in the first quarter, also told Reuters in an interview on Friday that he would be "very surprised" if Southeast Asia's second-biggest economy expands in the April-June quarter from the previous three months.
"I don't see investors leaving Thailand, but I think at the margin definitely investors may try to either go elsewhere or delay their investment decisions in Thailand. That's natural and to be expected," Korn said.
Korn added that optimistic forecasts for foreign direct investment into Thailand would need to be reviewed. Even before the latest violence, the Board of Investment forecast that foreign investment pledges this year could fall 15 percent.
"We need to get our house in order first before we expect our friends to trust us again, he said.
Life in Bangkok inched back to normal on Friday as the authorities cleaned up the capital after riots and arson attacks by anti-government protesters whose movement was put down by troops after a two-month rally.
In Bangkok, Thai Prime Minister Abhisit Vejjajiva said on Friday he was committed to a national reconciliation plan, two days after troops quelled the worst political violence in modern Thai history.
Korn was in Tokyo to attend a seminar after Abhisit cancelled a visit to Japan. He said earlier in the day he expected Thailand's economy to recover fairly quickly if stability reached over the past 24 hours is maintained.
Korn said he was also meeting Japanese company officials during his visit.
Japanese firms are Thailand's biggest investors and they have expressed concern about the political situation.
According to the Japan External Trade Organization (JETRO), Japan's direct investment in Thailand totalled 106 billion baht (2.3 billion pounds) in 2008, accounting for some 30 percent of total foreign direct investment.
"It is too early for me to be here to entice a higher level of investment. Frankly, I am here to tell the truth as good partners," Korn said.
"Telling as it is means the same with admitting the fact that there remains enormous challenges we face and questions for which there is still no answer. But we also tell (them) our commitment to finding resolutions, so that the Thai people and Japanese people can continue to work together in Thailand."
Korn said Thailand needs to convince financial markets that the kind of political conflict it has seen over the past few months would not happen again.
"If there is a sense that this kind of confrontation can break out any time, frankly that is too much political risk."
"We (Thailand) were the second-biggest story after Greece and after Iceland's volcano ... Being a top story is rarely good news."
(Editing by Chris Gallagher)