Thailand's Economy: More Trouble In Paradise
Bareksa • 02 Dec 2013
Thailand protests economy
Thailand's economy may struggle to bounce back from the current unrest as its growth engines sputter
Reuters.com - It's weathered unrest before, but Thailand's economy may struggle to bounce back from the current unrest as its growth engines sputter and the withdrawal of stimulus looms. Tara Joseph reports.
It's becoming an all too familiar scene in Thailand.
Anti government protests.
Violence in the streets and now - once again like three years ago - deaths and a continued standoff.
(SOUNDBITE) (English) REUTERS REPORTER, TARA JOSEPH, SAYING:
"The recent violence in the country's capital Bangkok took place perilously close to a main tourist area, threatening Thailand's global image just as the peak holiday season begins."
Thailand's economy - it's a major manufacturing base for everyone from U.S. hard drive makers to Japan's auto giants - is starting to show signs of strain.
(SOUNDBITE) (English) BANK OF SINGAPORE, CHIEF ECONOMIST, RICHARD JERRAM, SAYING:
"Well I suppose the worst case scenario would be change of government or as seen in the past 20 years, even some sort of military takeover...I think the most likely scenario is you have a bit of trouble and then in the end they can reach an accommodation and everything calms down. And I think the real, the more interesting downside risks seem to be very low probability."
Thailand's manufacturing output has contracted for the past seven months, and the nation's central bank has cut interest rates to prop up the economy.
Thailand's stock market is among the region's worst performers this year in U.S.-dollar terms down more than five percent.
The baht was the second worst performing emerging Asia currency in November. Only Indonesia with its soaring current account deficit faring worse.
The latest conflict continues to pit Bangkok's urban middle class and royalist elite against the mostly poor and rural supporters of Prime Minister Yingluck Shinawatra and her brother Thaksin, ousted in a 2006 military coup.
Despite the upheaval of the last few years, the economy has powered ahead giving the country its 'teflon Thailand' nickname.
But Thailand is certainly looking more vulnerable, and further violence will further test that reputation.