Finance Ministry to Help Offset Economic Aftermath of Anti-Government Protests

Federation of Thai Industries (FTI) chairman Santi Vilassakdanont said after the meeting that the premier wanted to be informed of how much each group of businesses and employees have been affected by the protests in Bangkok’s prime business area, Ratchaprasong intersection, so that the government could find measures to cushion the related impacts.

Prime minister Abhisit has ordered the finance ministry to find measures likely to lessen the effects from the demonstrations on each group of entrepreneurs, according to Mr Santi, adding that the ministry is expected to apply taxation measures to help those affected The measures will be forwarded to the joint committee’s meeting next month.

However, Mr Santi said the prime minister conceded the demonstration at Ratchaprasong intersection has caused a loss in revenues estimated about Bt200-300 million (some US$6-9 million) per day for the hotels on location, while around the same amount of money vanished from the tourism sector, and around Bt40-50 million ($1.25-1.5 million) for small- and medium-enterprises. Mr Santi added that the estimated losses have not yet included many other indirect impacts.

Meanwhile, Prime Minister’s Office vice-minister Puttipong Punnakan cited the private sector’s report at the meeting that tours to Thailand have been cancelled and there has been roughly only a 30 percent occupancy rate of rooms availability due to the prolonged protests and April 10 clashes between the Army and protesters.

An estimation says the number of foreign tourists in 2010 would drop to around 12-13 million, lower than the previously expected target of 15.5 million this year.

The sectors most affected from the continuing protests are airlines, hotels, public transport, restaurants, souvenir shops and tour guides.

The private sector estimated that if the demonstrations were prolonged to three months, the impacts would be on Thailand’s domestic consumption, the country’s Gross Domestic Product (GDP) of Bt20-30 billion, on tourism of Bt40-50 billion, as well as on direct investments to the GDP of around Bt10-20 billion. The country’s gross domestic product (GDP) is likely to drop by 0.3-0.5 percent (below the Fiscal Policy Office’s 2010 growth forecast of 4.5 percent), while Finance Minister Korn Chatikavanij said his year’s GDP could shrink by 1-2 percent.