The heating political situation, including a bomb attack at Banthad Thong Road over the weekend, has fuelled concerns among the private sector, inciting worry that such violence will adversely affect Thailand’s image and economy.
As reported in The Nation, the Federation of Thai Industries (FTI) expressed sentiment that the period leading up to the general election on 2 February could see more violence, with FTI’s vice chairman Thanit Sorat warning that Thailand is “falling into the status of a failed state, which will wipe out economic confidence.”
Sorat also believes that about 500,000 tourists have disappeared this year, and the number could rise to a million if the political violence is prolonged. The bomb attack comes at a critical time, primarily affecting tourism during the Chinese New Year period, from the end of January to the beginning of February.
Also, since the “Bangkok Shutdown” began last Monday, Bangkok-based SMEs that are suppliers to businesses, such as small independent hotels, have seen a significant drop in business. Overall spending is also down, as consumers are wary of spending on goods and services across the spectrum. Many banks in affected areas remained shut.
Coupled with a negative lead from Wall Street, the Thai bourse experienced thin turnover last Friday, despite last week’s SET index closing above 1,300 points for the first time this year. After net sales of THB1.83 billion last Thursday, foreigners bought THB607 million net on Friday, taking their net sales so far this month to THB 919 million.
In addition to the negative impact on the tourism industry and overall investment climate, the prolonged political unrest is also expected to hit export-sector orders from partners overseas.