Thailand’s economy contracted by 2.1 percent in the first quarter, slammed by a protracted political crisis that is likely to slow growth for the rest of the year.
The country’s National Economic and Social Development Board said yesterday that consumer confidence declined as a result of political unrest, reducing domestic demand compared with the fourth quarter of last year.
Thailand has been hit by six months of anti-government protests that have shut down parts of Bangkok for weeks at a time, and spawned violence in which 28 people have died and more than 800 have been injured.
The planning agency said that the Thai economy, which is Southeast Asia’s second largest, would grow by 1.5 to 2.5 percent this year, lower than the 3 to 4 percent growth it forecast in February.
Earlier this month, the country’s political crisis deepened after its Constitutional Court removed Thai prime minister Yingluck Shinawatra over nepotism, along with nine Cabinet members, in a case that many viewed as politically motivated. Protesters are now pushing for the government to be replaced.
A new government cannot be named without elections, which demonstrators have vowed to obstruct, absent reform first.
The government report yesterday said that the political unrest and delays in forming a fully functional government would obstruct budget disbursement this year and preparations for next year’s budget as well. It also said the implementation of key economic measures would be affected and the crisis would “continue to dampen consumer and business confidence, and thus private consumption and investment.”