Thailand’s Political Unrest Sapping GDP Growth

Posted by: : Paul EbelingPosted on: November 8, 2013 Thailand's Political Unrest Sapping GDP Growth

Thailand’s Political Unrest Sapping GDP Growth

Thailand Politics

The Thailand economy will expand 3.3-3. 4% this year, short of the 3.5% forcast, if the political protests are prolonged to the end of the year, an economist said Friday.

Thailands Senate is set to reject a proposed amnesty law for political offenses on 11 November after weeklong street protests raised concerns its passage would reignite political violence.

Opposition from the public, universities and business groups convinced a majority of  Thailand’s 149 senators to block the legislation, Senate Speaker Nikom Wairatpanij said at a media briefing in Bangkok Wednesday.

More than 32,000 people joined demonstrations in the Bangkok, capital and 17 other provinces on 4 November according to police estimates, with the push for the amnesty law weighing on Thai stocks and the baht.

Thanavath Phonvichai, director of the Economic and Business Forecasting Center at the University of the Thailand Chamber of Commerce, urged the government to put an end to the ongoing political conflict, which is weighing on consumer confidence, tourism and investment.

Thai Consumer confidence in October fallen to its lowest level in 19 months.

The expected fall of 5-10% of foreign arrivals and the loss of 10-20-B baht (US$ 320-640-M) from their spending would pose a main drag on Thailand’s economic growth, according to Thanavath.

The legislative failure would be a setback for Thaksin Shinawatra, who was ousted as prime minister in a Y 2006 coup and has guided policy from abroad since his sister, Yingluck, won elections in Y 2011.

Yingluck struggled to convince the public that the bill aimed to heal social divisions caused by the coup rather than help Thaksin return to Thailand and recover part of a fortune that was seized after he fled a jail term in Y 2008.

“I don’t want to see the amnesty law used as a political tool,” Yingluck said yesterday in a televised speech. “This government will work for the country’s benefit and will not use its majority to go against the people’s wishes.”

Parties linked to Thaksin have won the past 5 elections on support from rural areas, and Yingluck’s Pheu Thai party commands a majority in parliament.

Lawmakers from the Democrat party led marches through Bangkok’s streets on 4 November, paralyzing traffic in the Silom business district and near the Grand Palace, a top Thailand tourist attractions.

At least 32,000 people joined protests in Bangkok and 17 other provinces, police spokesman Piya Uthayo said, while thousands of university students and staff took part in a separate rally in central Bangkok yesterday.

A rejection by the Senate next week would see the bill returned to the lower house for as long as 180 days. The government will accept the Senate’s decision, Yingluck said.

Thai economist expected next year’s GDP to grow only 4.8-5%, instead of 5.1%.

This is an ongoing story, stay tuned…

Paul Ebeling,

 

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Paul Ebeling

Pattern Recognition Analyst, equities, commodities, forex
Paul Ebeling is best known for his work as writer and publisher of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly-regarded, weekly financial market letter, where he enjoys an international audience among opinion makers, business leaders, and respected organizations. Something of a pioneer in online stock market and commodities discussion and analysis, Ebeling has been online since 1994. He has studied and worked in the global financial and stock markets since 1984.
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