Thailand already facing huge losses from turmoil : study
Written by changthai11 on Sunday, September 14th, 2008
Thailand already facing huge losses from turmoil : study
By The Nation
Petchanet Pratruangkrai The Nation
The political turmoil has already cost Thailand between Bt19 billion and Bt35 billion and lowered this year’s economic-growth estimate from 5.6 per cent to 5.2-5.3 per cent.
So says a new study from the University of the Thai Chamber of Commerce.
If the disorder continues to the end of the month, the economy could grow only 4.9-5.1 per cent, and the Kingdom will lose between Bt40 billion and Bt62 billion in all sectors combined.
At a press conference yesterday, the university’s Economic and Business Forecasting Centre listed three possible scenarios, all of them indicating Thailand faces huge losses from the political turmoil and state-of-emergency declaration for Bangkok.
Consumption has already been reduced, tourists and new investors have delayed or cancelled plans to travel here and business transactions have been suspended, especially in the logistics and transportation sectors.
In the worst-case scenario, the Kingdom’s economy will grow only 4.5-4.8 per cent if the turbulence continues for longer than one to three months, denting confidence among consumers, tourists and investors. Thailand will lose Bt73 billion to Bt130 billion from reduced consumption, exports, investment and tourism.
In the second-worst case, if the situation ends within the next month, the economy will grow 4.9-5.1 per cent, and the country will lose Bt40 billion to B62 billion in all sectors.
The best-case scenario, in which the disorder ends immediately, sees the economy growing 5.2-5.3 per cent. Thailand will lose Bt19 billion to Bt35 billion from decreased consumption, investment, tourism and exports.
Centre director Thanawat Polvichai said the turmoil had seriously disrupted all business transactions.
“The state-of-emergency declaration, the workers’ strike, lower consumption and reduced tourist confidence have created huge losses for the country. Although the second-worst scenario is now the most likely one, the worst case could still happen, creating massive losses for the country,” he said.
Saowanee Thairungroj, vice president of the university’s Research Division, said the service sector had suffered the most from the recent turbulence, but that all businesses related to tourism, trading, manufacturing and agriculture would experience a slowdown.
Based on a survey of 820 respondents from September 3-5, almost 40 per cent said the disturbances had already affected them, mainly in the form of reduced sales revenue, profits and numbers of purchasing orders and even some cancellation of orders.
Wanchai Rattanawong, the university’s vice president for planning and development, said the three-day suspension of railway, port and airport services, along with disruptions in related businesses like ground logistics, had resulted in a loss of Bt3.9 billion.
He said if the problem continued another week, losses would reach Bt9.2 billion.
Aat Pisanwanich, director of the university’s International Trade Studies Centre, said exports would grow only 11.5 per cent to US$169 billion (Bt5.83 trillion) in the worst-case scenario, due to problems with shipping and reduced buyers’ confidence.
However, exports are expected to grow only 18.8 per cent to $181.1 billion, from a previous projection of 19 per cent, due to the three-day port closure. However, they could grow only 18.2 per cent to $180 billion if logistics problems continue for another week.
Thailand will also lose 440,000 travellers if the turmoil continues throughout this month, while 1.45 million visitors will be lost if it lasts the rest of the year.
