Thailand's economy faces more tough times because of the country's political turmoil and street protests in the capital Bangkok. Economists fear government efforts to stimulate the economy will be further delayed by the protests.
Monday is the start of Thailand's traditional new year, a three-day holiday that normally prompts plenty of spending on food, consumer goods and travel. But the holiday, and Thailand's economy in general, is being overshadowed by the country's political turmoil.
Anti-government protesters, mostly supporters of former Prime Minister Thaksin Shinawatra, continued to blockade streets in Bangkok Monday, a day after the government declared a state of emergency. Security forces and protesters clashed repeatedly throughout the day.
The protesters demand that the government of Prime Minister Abhisit Vejjajiva resign and call new elections.
On Saturday, the protesters forced the cancellation of a summit of Asian leaders in a beachside resort near Bangkok.
Somphob Manarangsan, an economist at Chulalongkorn University in Bangkok, says the protests will worsen the country's weak economy.
"As you know we are affected by the global crisis much more, and much more serious on both the real sector as well as for the export for production," said Somphob. "So from now on they will be affected by this kind of problem as well as several leading sectors of the economy. I think it's going to be very damaging to the Thai economy."
The tourism industry is a major casualty. Several countries have issued travel warnings for Thailand in the past few days. The warnings come just as industry started to recover from the damage done when anti-Thaksin protesters shut down Bangkok's airports late last year.
Starporn Seri-sinha, a tourism industry executive, says the protests are a harsh blow for the tourism industry.
"The impact is very damaging to Thailand's reputation as a tourist destination," said Starporn. "Most international tourists would be losing their confidence to believe that Thailand is a safe and peaceful destination."
Starporn expects visitor arrivals to fall by about a third this year, to less than 10 million. He does not expect the industry to recover this year.
Economists say they are concerned the protests will delay or undermine Prime Minister Abhisit's economic stimulus programs.
"The implementation of the stimulus packages would obviously be delayed. Infrastructure investment has a lot of spillovers and is much broader," said Jean Pierre Verbiest, the Asian Development Bank representative in Thailand. "So they would be very much delayed if there was a change in government, if there were major disruptions in policy making. That would have a big impact."
The Asian Development Bank and other international banking houses say Thailand's political strife could mean the economy contracts by five percent this year, instead of the earlier forecast of a two percent decline.