BoT: Thai economic recovery at risk due to political unrest

Thailand’s gross domestic product (GDP) during the second quarter of 2009 contracted 4.9 percent compared to the corresponding period of 2008 but grew 2 percent from the first quarter of 2009, which is a positive sign, Mrs. Atchana said Saturday.

Improvement in the Thai economy was due both to global economic recovery and higher overseas purchase orders of Thai inventoried products but these two significant factors may not be indicators of sustainable recovery as risk factors persist and may still impact the economy, she said.

Existing domestic political problems continue to affect the Thai economy, Mrs. Atchana said. The crisis has already affected tourism and related industries, shaking public confidence in major government sponsored projects such as the mass transit expansion programme, and impacting the confidence of investors and consumers.

She said if political unrest continues to persist in Thailand; neither investment not consumption will improve.

Despite the negative picture, the central bank maintains its projections that the Thai economy will contract between 3-4.5 per cent this year while GDP will grow 3-5 per cent next year, she added. (TNA)