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

Republican Majority in Congress Off to Rough Start

Standoff over Homeland Security funding exposes philosophical, tactical problems within party More

Pakistan Blocks Baloch Activist from US Trip

Human Rights Commission of Pakistan slams Islamabad officials for stopping people from leaving country to attend human rights conference More

Video Muslims Long Thrived in North Carolina Before Students Killed

Idyll shattered February 10, when three Muslim university students living in Chapel Hill were gunned down by a neighbor More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Sierra Leone Ebola Orphans Face Another Crisisi
X
March 06, 2015 12:28 AM
There's growing concern about the future of an orphanage run by a British charity in Sierra Leone, after a staff member and his wife died this week from Ebola. The Saint George Foundation Orphanage in Freetown is now in quarantine, with more than 20 children and seven staff in lock-down. The BBC has agreed to share Ebola-related material with Voice of America because of the difficulties faced by media organizations reporting the crisis. Clive Myrie reports from Sierra Leone.
Video

Video Sierra Leone Ebola Orphans Face Another Crisis

There's growing concern about the future of an orphanage run by a British charity in Sierra Leone, after a staff member and his wife died this week from Ebola. The Saint George Foundation Orphanage in Freetown is now in quarantine, with more than 20 children and seven staff in lock-down. The BBC has agreed to share Ebola-related material with Voice of America because of the difficulties faced by media organizations reporting the crisis. Clive Myrie reports from Sierra Leone.
Video

Video Growing Concerns Over Whether Myanmar’s Next Elections Will Be Fair

Myanmar has scheduled national elections for November that are also expected to include a landmark referendum on the country's constitution. But there are growing concerns over whether the government is taking the necessary steps to prepare for a free and fair vote. VOA Correspondent Steve Herman was recently in Myanmar and files this report from our Southeast Asia bureau in Bangkok.
Video

Video Nigeria’s Ogonis Divided Over Resuming Oil Production

More than two decades ago, Nigeria’s Ogoni people forced Shell oil company to cease drilling on their land, saying it was polluting the environment. Now, some Ogonis say it’s time for the oil to flow once again. Chris Stein reports from Kegbara Dere, Nigeria.
Video

Video Winter Weather Strikes Eastern US...Again!

A new wintry blast has hit more than 20 states in the U.S. Midwest and Mid-Atlantic region, adding more snow to the piles from previous storms. Tired of shoveling snow, breaking the ice and dealing with accidents, flight delays and property damage, most Americans hope this is the last bout of cold for the season. Zlatica Hoke reports.
Video

Video Muslims Long Thrived in N Carolina Before Slaying of 3 Students

The killings of three Muslim students in North Carolina early last month came as Muslims across the United States have felt under siege, partly as a result of terrorist attacks being committed internationally in the name of their faith. But Muslims have long thrived in university cities in this part of the American South. VOA's Jerome Socolovsky reports.
Video

Video Fuel Shortages in Nigeria Threaten Election Campaigns

Nigeria is suffering a gas shortage as the falling oil price has affected the country’s ability to import and distribute refined fuels. Coming just weeks before scheduled March 28 elections, the shortage could have a big impact on the campaign, as Henry Ridgwell reports for VOA.
Video

Video Report: Human Rights in Annexed Crimea Deteriorating

A new report by Freedom House and the Atlantic Council of the United States says the human rights situation in Crimea has deteriorated since the peninsula was annexed by Russia in March of last year. The report says the new authorities in Crimea are discriminating against minorities, suppressing freedom of expression, and forcing residents to assume Russian citizenship or leave. Zlatica Hoke has more.
Video

Video 50 Years Later African-Americans See New Voting Rights Battles Ahead

Thousands of people will gather to mark the 50th anniversary of a historic civil rights march on March 7th in Selma, Alabama. In 1965, dozens of people were seriously injured during the event known as “Bloody Sunday,” after police attacked African-American demonstrators demanding voting rights. VOA’s Chris Simkins introduces us to some civil rights pioneers who are still fighting for voting rights in Alabama more than 50 years later.
Video

Video Craft Brewers Taking Hold in US Beer Market

Since the 1950’s, the U.S. beer industry has been dominated by a handful of huge breweries. But in recent years, the rapid rise of small craft breweries has changed the American market and, arguably, the way people drink beer. VOA’s Jeff Custer reports.
Video

Video Video Claims to Show Shia Forces in Iraq Executing Sunni Boy

A graphic mobile phone video is spreading on the Internet, claiming to show Iraqi forces or Shia militia executing a handcuffed Sunni boy. Experts have yet to verify the video, but already Islamic State followers are publicizing it across social media, playing on deep-rooted sectarian fears. VOA’s Jeff Seldin reports.
Video

Video Ukrainian Authorities Struggle to Secure a Divided Mariupol

Since last month's cease-fire went into effect, shelling around the port city of Mariupol has decreased, but it is thought pro-Russian separatists remain poised to attack. For the city’s authorities, a major challenge is gaining the trust of residents, while at the same time rooting out informants who are passing sensitive information to the rebels. Patrick Wells reports for VOA.
Video

Video Myanmar's Traditional Fashion Choices Endure

The sartorial choices of Myanmar’s men and women quickly catch the eye of any visitor to the tropical Southeast Asian country. But at a time when Myanmar’s political and economic opening is bringing affordable western fashions to the masses, will the country’s unique fashion trends endure? VOA Correspondent Steve Herman in Yangon explores that question.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More