‘Ground zero’ of Asian financial crisis seen sailing through

Thailand was "ground zero" for the Asian financial crisis in the late 1990s, and the country is once again experiencing slowing growth, a current account deficit and a weakening currency. But the country's finance minister and analysts say, this time around, the country isn't at risk of a major meltdown.

Kittiratt Na-Ranong, the country's finance minister and deputy prime minister, defended Thailand's economic performance on Monday and sounded sanguine despite a shift to a $5 billion current account deficit in the second quarter from a $1 billion surplus in the first quarter.

It's not a chronic deficit, Kittiratt told CNBC. "We have to import more to replace those (machines) and equipment suffering from the flood," he said, referring to the flooding in late 2011 which caused an estimated $40 billion worth of damage.

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While most emerging markets with current account deficits, such as India and Indonesia, have seen their currencies take a hit from the market turmoil in recent weeks, the Thai baht has weakened only 2.3 percent this month against the dollar. By comparison, India's rupee has tumbled 16 percent and Indonesia's rupiah has weakened 5.5 percent.

Kittiratt said he wasn't concerned about the country's weakening growth.Thailand slipped into technical recession in the second quarter, contracting 0.3 percent from the previous quarter, after the first quarter's 2.2 percent contraction.

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Kittiratt argues that seasonal factors were responsible for much of the decline, with April being a holiday month, and the effect being compounded by a cutoff of natural gas imports from Myanmar for more than a week due to maintenance. He points to the second quarter's 2.8 percent year-on-year increase in gross domestic product as more meaningful.

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John Gorman, managing director and senior rates trader at Nomura Securities said Kittiratt had a point, but added that "on the whole, if you look at all the data, it's weak. It's weak across all the emerging markets."

Others see positives ahead. Thailand's economic activity will likely rebound in the third quarter on its "sound" fundamentals, with external demand potentially recovering somewhat in the fourth quarter, Su Sian Lim, an Asean economist at HSBC, said in a note last week.

Kittiratt also isn't terribly concerned about the baht weakening from around 31.26 against the U.S. dollar on Aug. 15, just as the market rout was beginning, to touch around 32 late last week.

"When the Thai baht is at this level, I'm pleased and happy because, of course, the exporters can perform their role now," he said.

(Read more: Are emerging markets facing an 'abyss'?)

In the late 1990s, Thailand was "Ground Zero" for the Asian Financial Crisis after it allowed its currency to float freely, leading the baht to decline from 25 to the U.S. dollar to a low of 57 in less than six months.

Even the Federal Reserve's planned tapering of asset purchases doesn't faze Kittiratt, despite fund outflows from the country. Foreign investors have pulled around $1.04 billion from Thai equities over the past four weeks, according to a report from Jefferies. By comparison, Thailand's market capitalization is around 11.67 trillion baht ($36.57 billion).

(Read more: Is taper talk really behind emerging markets rout?)

"Some of this money shouldn't have come into this country. So when it moves back, we don't have to worry too much," Kittiratt said, referring to hot money inflows.

"The U.S. has got to slow down, increasing the money supply into the global economy someday soon. Or else the whole global economy would suffer," he added.