The six-month-long political turmoil has taken its toll on the economy, with the National Economic and Social Development Board (NESDB) reporting a contraction in growth for the first quarter of this year.
Vichai: Protests hurting growth
Gross domestic product shrank to 0.6% in the three months to March compared to the same period last year. Growth in the final quarter of last year was the same, a dramatic decrease in the 5.4% growth reported in the first quarter of 2013.
On weakened results, the state’s planning agency yesterday cut its growth forecast for this year to 1.5-2.5% from a range of 3-4% forecast earlier, and lowered the export growth estimate 5-7% to 3.7%. Total investment may fall 1.3% this year from an earlier prediction of a 3.1% increase.
The NESDB said growth in the rest of the year is expected to be constrained by the political uncertainty, which has caused a delay in the formation of a new government.
The delay would obstruct the budget disbursement, the implementation of key economic measures, the fiscal 2015 budgeting process, and dampen confidence.
The export sector seems likely to pick up more slowly due to the slow recovery of the global economy, particularly the Chinese and other Asian economies. As a result, contributions from exports are likely to be lower than previously thought, it said.
Vichai Assarasakorn, vice-chairman of the Thai Chamber of Commerce, repeated his calls for ways shore up the economy.
“The engines which drive Thailand’s growth are coming to halt because of the protracted conflict,’’ said Mr Vichai.
“All parties need to give a lending hand to salvage the sinking economy without waiting for any political reforms.”