BANGKOK, May 24 – Thailand\’s economy grew at breakneck pace early this year but the deadly unrest that began in March has clipped the full-year growth forecast by 1.5 percentage points, officials said on Monday.
Prime Minister Abhisit Vejjajiva said he would reach out to international investors to try to convince them the country\’s economic fundamentals remain strong despite the recent chaos.
The economy grew by a blistering 12 percent in the first quarter but Abhisit said he expected riots that trashed parts of central Bangkok last week to have a deep impact on second-quarter performance.
"The Thai economy has repeatedly experienced crisis and managed to revive, but whether it can achieve that this time or not depends on our people," he told reporters.
The National Economic and Social Development Board (NESDB) said that in the first quarter, every engine of the economy — tourism, exports, consumption and private investment — powered along.
"Confidence had returned and our economy was back on track, and I feel very regretful about these events," said NESDB secretary general Amphon Kittiamphon.
"The impact was very serious… and affected 1.5 percentage points of Thailand\’s GDP.
"The Thai economy had the potential to grow six to seven percent (in 2010) because private investment was continuing and confidence had been restored," he said.
"But because of the protests and riots, the NESDB still maintains its growth forecast for the year of 3.5-4.5 percent."
Amphon said that tourist arrivals in the first quarter had reached an unprecedented high of 4.7 million, setting up a full-year target of 16 million, but this had now been downgraded to 13 million arrivals.
The NESDB said that would cost Thailand 113 billion baht (3.5 billion dollars) in lost income, as visitors alarmed by images of shooting and mayhem in Bangkok cancelled in droves.
"Growth in the second quarter will still be positive due to exports, which will balance lost tourism, but if the unrest continues the third quarter will be negative and the last quarter could be even worse," Amphon said.
Anti-government protests that broke out in mid-March have left 86 killed and 1,900 injured. The "Red Shirt" demonstrations were shut down in a military offensive last Wednesday that triggered a rampage of arson and looting.
Thai stocks had fallen 1.5 percent by late morning as trade resumed after the crisis.
The stock exchange was forced to close after a half-day session Wednesday when it was targeted in an arson attack. Dozens of other major buildings including Thailand\’s biggest shopping mall were torched in the mayhem.
"There\’ll be consequent losses to follow. Investors are pricing in how much the damage would affect each listed company," Charoen Iamphattanatham from KT Zmico Securities told Dow Jones newswires.
Shares in Central Pattana plummeted 8.3 percent to a one-month low of 18.70 baht. Its flagship mall Central World, which contributed nearly a quarter of the firm\’s total income, was left in ruins and partly collapsed.