K-Research: Prolonged political upheaval may cap GDP growth at 2.7%

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BANGKOK, 13 Jan 2014  Kasikorn Research Center Public Company Limited (K-Research) has predicted that the current political turmoil, if prolonged, may set Thailand’s Gross Domestic Product (GDP) growth back to as low as 2.7%. 

President of the K-Research, Chao Kengchon told the press that how much the nation’s economic growth would be affected by today’s gathering of the People’s Democratic Reform Committee (PDRC) depends on how much the rally would cripple the capital’s businesses. Currently Bangkok generates 10 billion baht worth of businesses daily, or one-third of the country’s overall GDP.

Nonetheless, Mr. Chao said that further observation is needed to determine the rally’s effects on the economy, adding that a prolonged rally or violent turnout would drag the GDP down even lower. But initially the center projected this year’s GDP at 2.7% if there is no new administration within the first half of the year. However the yearly GDP could be as high as 3.7% if a new government is formed and be able to kick start some investment projects.

As for the capital and monetary markets, Mr Chao said that aside from internal politics, other key factors lie in the U.S. economic figures and the Federal Reserve’s quantitative easing measures.