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Thai political drama :
Fresh blows on economy
THAILAND: Thailand’s fresh political dramas will inflict huge tourism
losses, weigh down the stock market, and crimp growth in an economy
already in crisis from the global downturn, analysts said Wednesday.
“The Government must work hard to restore political stability in
Thailand quickly. The next three months will be critical,” said
Thanavath Phonvichai from the Thai Chamber of Commerce’s economic and
forecasting unit.
Anti-government protesters shut down an Asian summit at the weekend
and then battled with armed troops in the streets of Bangkok Monday in
the biggest test of premier Abhisit Vejjajiva’s four-month-old
administration.
A successful military campaign to corral the demonstrators and force
them to disperse is seen as strengthening Abhisit’s hand against
ex-premier Thaksin Shinawatra who is plotting to return to power.
But Thailand’s stock market will deliver its verdict on his
performance when it re-opens on Thursday, after a three-day holiday.
“In general, sentiment will be quite negative across all markets but
the recent political shock will probably reflect a more sombre equity
market,” said Jun Trinidad, a Citibank regional economist.
Trinidad said that a boost for Abhisit reflected in the markets was
“a near-term possibility”.
“But I don’t think that the conflict has ended with the army
intervening on behalf of the prime minister. Eventually the issue needs
to be settled once and for all,” he said.
Thanavath said recent events would cost Thailand’s tourism sector
another 100 billion baht (2.8 billion dollars) in losses after already
taking big hits from past troubles including last year’s nine-day
closure of Bangkok’s airport.
“The political situation has affected the Thai economy, especially on
confidence in investment and tourism,” he said.
“But the protest ended earlier than we had expected. The government
stood firm on peaceful measures and no bloodshed.
This is positive and can help the government restore the country’s
economy more easily later,” he said.
Thailand’s finance ministry last month forecast the economy to shrink
by two to three percent this year, the first contraction in a decade.
Private-sector forecasts are even gloomier.
Trinidad said Abhisit, who unveiled a 117-billion-baht stimulus
package in January, had been supportive of growth.
Bangkok, Wednesday, AFP |
