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Finance Minister: 2008
GDP likely to fall to only 2%
Thailand’s gross domestic product (GDP) in 2008 could register its lowest on
record - only 2 percent - as projected by many academic institutes as
Thailand’s economy has been severely impacted both by the global financial
crisis and domestic political turmoil to such an extent that it could not be
forecast when it would end, according to Finance Minister Suchart
Thada-Thamrongvech.
The minister said the most worrisome factors are the worsening economy and
domestic politics in the event of no compromise.
Mr. Suchart said the political turmoil - including the closure of the
country’s two main airports, Suvarnabhumi and Don Mueang, had shattered the
confidence of the international business community and it would take at
least a year to revive confidence.
If the crisis drags on for three months, the National Economic and Social
Development Board (NESDB) estimates that it would affect the government
income by Bt100 billion as the protest has a strong impact on the tourism
industry, foreign affairs and business confidence.
The PAD seized Government House in late August and stepped up its pressure
by occupying Suvarnabhumi International Airport last Tuesday and storming
Don Mueang domestic airport last Wednesday, which virtually paralyzed air
traffic in the kingdom. (TNA)
A 3.5 million drop in foreign
arrivals likely next year, says BoT
The number of foreign tourist arrivals is likely to fall by
3.5 million next year - around 40 percent - if the political crisis drags on
until the year-end, according to the Bank of Thailand (BoT).
Ummara Sripayak, senior director of the central bank’s Local Economy Division,
said the expected sharp decline in the number foreign arrivals is tantamount to
a loss of Bt140 billion, or around 1.5 percent of Thailand’s gross domestic
product (GDP).
She said one million foreign tourists vanished when the severe acute respiratory
syndrome (SARS) broke out some years ago and by 180,000 when the devastating
tsunami occurred.
Ummara revealed the economy in October slowed down in all areas. In particular,
the number of foreign tourists continued dropping due to the political unrest.
It is expected the siege of the Suvarnabhumi Airport by anti-government
protestors would undermine tourists’ confidence and affect employment and
earnings in the related service sector.
The persistent political tension has made the overall economy deteriorate in all
areas.
Simultaneously, the global economy has slowed down with purchase orders from
overseas dropping considerably.
It’s resulted in the Business Confidence Index in October declining to 38.3 and
the confidence index in the next three months sliding to 42.5 percent, the
lowest in almost nine years.
The consumer confidence index also decreased to 75.8, the lowest in a year.
Ummara said exports in October totaled US$14.99 million, up only 4.7 percent,
the lowest in 76 months, while imports totaled $15.96 billion, up 23.5 percent,
resulting in a trade surplus of $964 million.
In addition, the central bank plans to revise the economic growth estimate at
the meeting of the Monetary Policy Committee on December 5 since the global
economy is slower than expected and the local political tension has escalated,
she said. (TNA)
BoT chief says it’s still hard
to guess impact of political crisis
Bank of Thailand (BoT) governor Tarisa Watanagase on Thursday said it
remains difficult to determine how badly the ongoing political crisis will
affect the country’s economy, but suggested that any estimate must simply be
guesswork.
She said that the committee chaired by Army Commander-in-Chief Gen. Anupong
Paochinda Wednesday did not attempt to assess the impact of the political
crisis on the economy, but dealt only with the security situation.
It was just a discussion to find a way out of the political impasse, she
said, and all participants wanted the conflicting parties to compromise.
“All people want to see an end to the political crisis,” Mrs. Tarisa said,”
but they must know the problem has not just occurred. It has persisted for
several months, so it will take time to solve.”
Regarding the impact of the political turmoil on the economy, she said no
one could answer how much the economy will grow because it also depends on
global economic conditions.
At present, she said, no one dares to say confidently when the global
economy will turn around although many countries have issued measures to
assist and shore up their economies.
Tarisa said she believes the export sector would recover quickly when the
global economy picks up.
However, she admitted Thailand’s tourism would be definitely affected by the
current political woes and the shutdown of Suvarnabhumi Airport. (TNA)
Sinking economy: Thai Finance Ministry revising economic growth forecast
Political crisis and disorder in Thailand has led the
Ministry of Finance to revise its economic growth forecast for 2008 and 2009
given rapid changes in economic performance, according to Lavor Saengsanit,
deputy spokesman of the Fiscal Policy Office.
He said the ministry forecast earlier that the economy this year would grow 5
percent.
But since the economy signaled a clear economic slowdown in October - witnessed
by a decline in exports, consumption, and private investment - the ministry must
revise its economic growth estimate by taking into account economic data for the
remaining two months of the year.
He said the shutdown of Suvarnabhumi Airport by the anti-government People’s
Alliance for Democracy (PAD) will significantly damage Thailand’s tourism
sector, worsening an already problematic economic situation.
He said exports of fresh produce, vegetables and fruits, and related
agricultural products, as well as leather goods, had begun to feel the pinch
because they are shipped by air freight, he added. (TNA)
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