SET, baht, tourism may face setback: UTCC

Written by Writer on Tuesday, October 7th, 2008

SET, baht, tourism may face setback: UTCC

Thailand’s stock market, baht currency and tourism sector will likely suffer from the economic crisis in the fourth quarter of 2008, according to University of Thai Chamber of Commerce (UTCC)’s Economic and Business Forecasting Centre director Thanawat Polvichai.

In the real world, the baht fell significantly on Tuesday morning after police used tear gas to disperse protesters at the parliament. By noon, the currency had fallen from 34.2 to 34.7 per US dollar.

On the Stock Exchange of Thailand, investors continued to flee, pushing down the SET index by yet another 14.49 points on Tuesday morning, to 537.31.

With something of the sense of the obvious, Mr Thanawat said that if the government could not end the People’s Alliance for Democracy (PAD)’s mass demonstration, it could worsen the country’s economy, especially the local stock and foreign exchange markets, in the short and middle terms, Mr Thanawat said.

He pointed out that the Stock Exchange of Thailand (SET) is already moving in a negative direction due to the financial meltdown in the United States, and it could further lower the confidence of investors and affect the Thai currency, if the political deadlock continues.

The tourism segment would encounter the most impact, followed by the consumer and investment sectors in the country, he said, and the setback would lead to lower earnings in the country’s economy during the final quarter of this year.

The economist said the political situation needs to be closely monitored, and should political uncertainties prolong and trigger violence, the economy would suffer considerably. However, if the government can end the problem quickly, the economy still has a chance to recoup.

Bangkok Post