News / Asia

Confidence in Thai Economy Slumps Amid Political Turmoil

Anti-government protesters eat dinner outside a McDonald's restaurant in central Bangkok. Protesters occupy the same shopping and business districts, Feb. 6, 2014.
Anti-government protesters eat dinner outside a McDonald's restaurant in central Bangkok. Protesters occupy the same shopping and business districts, Feb. 6, 2014.
Ron Corben
Business confidence in the Thai economy has slumped to its lowest levels in more than four years amid the nation's ongoing political turmoil. A senior World Bank economist said recovery is still possible over the year's second half, if political tensions ease and public and private sector spending resumes.

In its latest indicator released Thursday, the Federation of Thai Industries warned Thailand's ongoing political turmoil had triggered a dramatic loss of confidence, with surveys showing indices at their lowest since June 2009.

Loss of confidence

The Federation pointed to a decline in overall domestic orders, sales volumes, production output as well as poor business performance.  Analysts say private sector investors are holding back until the political situation clears.

World Bank senior economist Kirida Bhaopichitr said an easing in political tensions is needed for the economy to reach a four percent growth rate by year's end.
 
Also the government is struggling to make payments in a controversial rice price pledging scheme. At present, thousands of farmers are still to be paid some $4.2 billion.

"Our assumption is that the political unrest will end in the middle of the year. So if it does not, the four percent will not be reached. Farmers will be paid their 130 billion baht in the pledging program by the end of the first quarter. So if they are not, then their consumption will be affected," said Kirida.

State-owned think tank, National Economic and Social Development Board (NESDB), reported the economy growing in the December quarter at just six-tenths of a percent, leaving 2013 growth at under three percent, well down from six-and-a-half percent in 2012.

Political turmoil

The slower growth came as anti-government protests in November started to affect local demand and tourism. Tourism officials say losses could amount to as much as $322 million.

The protests have evolved into demands for Prime Minister Yingluck Shinawatra to resign, amid calls for political reforms.  

Other economic concerns include central bank warnings over a sharp rise in household debt.

The World Bank's Kirida said income disparities between Bangkok and the provinces need to be addressed to reduce inequalities and, in turn, ease underlying political tensions. "If you want to resolve this political tension in the future, and at the same time help Thailand to grow inclusively, issues of inequality have to be resolved. Only if everyone in Thailand can participate in growth, it's very difficult for Thailand to actually move up the value chain and become a high income country," he stated.

Akio Egawa, a researcher on the Thai economy from the Tokyo-based Economic and Social Research Institute (ESRI), said slower rates of growth of less than four to five percent also undermine Thailand's efforts to lift the economy towards higher earnings and higher productivity.

"Thailand must grow at four/five percent. Otherwise, Thailand will fall into the income trap. But in the current situation the government cannot make an effort to raise the economic growth rate and that's a problem. The very low growth rate is due to the political conflict. So the political conflict must be eased and that cannot be solved easily," said Egawa.
 
Thailand remains in the grip of uncertainties as the government faces legal challenges on differing fronts. So far, efforts to broker a negotiated settlement between the government and protesters have failed, leaving the country on an uncertain path forward.

You May Like

Bernie Sanders Surge Reflects US Shift on Socialism

Although most analysts say it is unlikely he will get the Democratic nomination, Sanders' campaign opens up questions and issues that are otherwise marginalized More

Crowdfunding Helps Save Neil Armstrong's Spacesuit

Smithsonian turns to Kickstarter to raise more than $700,000 to help preserve the spacesuit worn by the first man to walk on the moon More

Video On IS Frontline, Kurdish Fighters Ready for Offensive

Peshmerga soldiers say although they need more heavy artillery, they are poised to take the fight to the Islamic State extremists on their turf More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Drowned Migrant Toddler Photo Triggers European Outragei
X
Henry Ridgwell
September 04, 2015 11:36 AM
The harrowing picture of a drowned three-year-old Syrian boy washed up on a Turkish beach appears to have galvanized Europe’s leaders into doing more to address the refugee crisis. France, Germany and Italy issued a joint call Thursday for compulsory quotas of refugees for all EU states. But there were chaotic scenes in Hungary as police tried to force migrants off a train heading for Austria. Henry Ridgwell has more. And a caution, some of the images in this report may be disturbing.
Video

Video Drowned Migrant Toddler Photo Triggers European Outrage

The harrowing picture of a drowned three-year-old Syrian boy washed up on a Turkish beach appears to have galvanized Europe’s leaders into doing more to address the refugee crisis. France, Germany and Italy issued a joint call Thursday for compulsory quotas of refugees for all EU states. But there were chaotic scenes in Hungary as police tried to force migrants off a train heading for Austria. Henry Ridgwell has more. And a caution, some of the images in this report may be disturbing.
Video

Video Russians Observe 11th Anniversary of Beslan School Attack

This week, Russians have been observing the 11th anniversary of the attack by Islamic militants on a school in Russia's North Caucasus region that killed more than 330 hostages, including 186 children. The three-day siege and massacre that started on September 1, 2004 took place in Beslan, a town in the republic of North Ossetia, and is one of the bloodiest terrorist acts ever in Russia. VOA's Mike Richman reports.
Video

Video Native Americans Debate: Father Serra, Saint or Sinner?

Pope Francis will canonize an 18th century missionary to Spanish California during a papal visit to the United States this month.  But some Native Americans have criticized the elevation to sainthood of the missionary priest, Junipero Serra. VOA's Mike O’Sullivan has more from Los Angeles.
Video

Video Calais School Offers Another Face of Europe’s Migrant Crisis

Europe is facing mounting criticism over how it’s handling its biggest migration crisis since World War II. But not all Europeans believe building walls or passing repressive policies are the answer. A school for migrants in the French port city of Calais, is opening doors and building bonds across nationalities. VOA's Lisa Bryant reports.
Video

Video Kurdish Fighters on IS Frontline Ready for Offensive

Finger on the trigger, the Kurdish Peshmerga soldier stared across the dust at a village taken over by Islamic State extremists. The Kurdistan’s Khazir frontline, just 45 minutes from the Islamic State stronghold of Mosul. And at this point, the militants were less than two kilometers away. VOA's Sharon Behn reports.
Video

Video China Announces Troop Cuts at WWII Parade

Chinese President Xi Jinping Thursday announced plans to cut the world’s largest military force by 300,000 troops. The announcement was made during a massive military parade to commemorate victory over Japan in World War II. The event was shunned by most Western leaders and for some is raising fresh concerns about China’s military ambitions. VOA’s Bill Ide has more from Beijing.
Video

Video Russia-Japan Relations Cool as Putin Visits China for WWII Anniversary

Russian President Vladimir Putin is in Beijing for commemorations of the 70th anniversary of China's WWII victory over Japan. Putin is expected to visit Japan later this year, but tensions between Tokyo and Moscow over islands disputed since the war, and sanctions over Ukraine, could pour cold water on the plan. VOA's Daniel Schearf reports.
Video

Video Yemen ‘on Brink of Disaster’ as Medical Shortages Soar

Aid agencies warn Yemen is on the brink of humanitarian disaster – with up to half a million children facing severe malnutrition, and hospitals running out of basic medicines. There are fears Yemen's civil war could escalate as the coalition led by Saudi Arabia tries to drive back Houthi rebels, who seized control of much of the country earlier this year. Henry Ridgwell reports.
Video

Video Apps Helping Kenyan Businesses Stay Ahead of Counterfeiters

Counterfeit goods in Kenya cost the government as much as $1 billion each year in lost tax revenues. The fake goods also hurt entrepreneurs who find it hard to carve out a niche in the market and retain customers. But as Lenny Ruvaga reports from Nairobi, information technology is being used to try to beat the problem.
Video

Video Nobel Prize Winner Malala Talks to VOA

Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video War, Drought Threaten Iraq's Marshlands

Iraq's southern wetlands are in crisis. These areas are the spawning ground for Gulf fisheries, a resting place for migrating wildfowl, and source of livelihood for fishermen and herders. Faith Lapidus has more.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Rebuilding New Orleans' Music Scene

Ten years after Hurricane Katrina inundated New Orleans, threatening to wash away its vibrant musical heritage along with its neighborhoods, the beat goes on. As Bronwyn Benito and Faith Lapidus report, a Musicians' Village is preserving the city's unique sound.
Video

Video In Russia, Auto Industry in Tailspin

Industry insiders say country relies too heavily on imports as inflation cuts too many consumers out of the market. Daniel Schearf has more from Moscow.
Video

Video Scientist Calls Use of Fetal Tissue in Medical Research Essential

An anti-abortion group responsible for secret recordings of workers at a women's health care organization claims the workers shown are offering baby parts for sale, a charge the organization strongly denies. While the selling of fetal tissue is against the law in the United States, abortion and the use of donated fetal tissue for medical research are both legal. VOA’s Julie Taboh reports.

VOA Blogs