Thailand coup adds to challenges for economy
May 24, 2014, 12:05 am TWN
BANGKOK--Thailand's economy was already struggling before the country's military seized power in a bloodless coup Thursday, saying it needed to restore order after six months of protests aimed at ousting the elected government. The military takeover, the second since 2006, could ensure stability in the short term. But analysts fear the army's intervention will result in Thailand's political divide becoming even sharper, holding back the economy and living standards in the longer run.
By The Numbers
Among developing countries, Thailand is in the top tier for incomes and standard of living, a position that puts developed status within reach if growth isn't stymied by political upheaval. It is the sixth largest economy in Asia with GDP of about US$366 billion and is significant to the world as a food exporter, tourism destination, and manufacturer of cars and computer hard drives.
Weighed down by political uncertainty, the economy contracted 2.1 percent in the first quarter from the previous quarter. Moody's Analytics was forecasting the economy to grow 0.2 percent this year but says it may now suffer a recession, which would be a woeful performance compared with 6.5 percent growth in 2012.
Tourism employs millions and directly contributes about 6 percent of GDP. For January to March, foreign tourists dropped 6 percent to 6.6 million as headlines overseas about protests and violence in Bangkok muddied the welcome mat. In 2010, violent street battles and an army crackdown killed dozens.
"We are now offering discount prices to attract customers that may have a little worry about the situation there," says Chen Jiying, saleswoman at Beijing Youth Tourist Service. Still, the strong appeal of Thailand's pristine beaches, world famous food and vibrant culture along with savvy marketing has consistently lured visitors back in record numbers.