SINGAPORE – Recent protests in Thailand will be a “double whammy” for the country’s growth, which has already suffered from the Covid-19 pandemic, analysts said.
Moreover, protesters will not leave until they see a “new” Thailand, Thitinan Pongsudhirak, a professor at Chulalongkorn University, told CNBC on Friday.
On Thursday, the Thai government declared a state of emergency, as thousands of protesters gathered in central Bangkok this week. They camped outside the prime minister̵7;s office, and obstructed a royal motorcade, according to Reuters. They have some demands – the main ones include monarchical reform, a new constitution and the removal of Prime Minister Prayuth Chan-ocha.
“Rising political temperature in Thailand following the announcement of a state of emergency in Bangkok will have a major blow to an economy that is under the influence of the pandemic,” Lavanya Venkateswaran, market economist and Mizuho Bank, wrote in a note .
Mizuho Bank lowered its estimated 2020 GDP growth for Southeast Asian countries from -6.3% to -7.5%.
“This time the social unrest brought on by decades of deep political division was exacerbated by the feeling of COVID-19,” Venkateswaran said, citing areas affected by political uncertainty as well. of affected by the pandemic. This includes weaker private sector spending on investment and consumption and a fall from lower tourist arrivals. The Thai economy relies heavily on tourism for growth.
During the protests, veteran investor Mark Mobius told CNBC on Friday: “This is a serious situation, there is no question about it, mainly because tourism is very important for Thailand and if you have trouble, tourism does not enter. and you have a real problem. “
The state of emergency will increase political uncertainty – and as it does during the pandemic – it has proven to be a “double whammy” in this year’s growth and in the medium term, Mizuho Venkateswaran said.
Calling the situation “unbearable,” Pongsudhirak of Chulalongkorn University said: “We have never seen these kinds of protesters, they are already on the streets … in resistance, determination, in the face of emergency decrees.”
“They seem enthusiastic about me, they won’t leave until they see a new kind of Thailand,” he told “Street Signs.” Of CNBC.
He added that Thailand’s economy has “stopped,” that the government is “unlucky” and mismanaging the economy.
Thai protesters saluted with three fingers as they protested against the government at the Democracy Monument in Bangkok, Thailand, October 13, 2020.
NurPhoto | Getty Images
This week’s protests follow months of anti-government demonstrations that erupted last year, after the court banned the most vocal party opposing the prime minister’s government.
Demonstrations stopped when the pandemic and the measures to stop the spread – but it started again in July. Pro-democracy activists argued that the monarchy was too close to the army, and said that democracy had been weakened, according to a Reuters report.
Referring to their request for a changed monarchy, the Venuateswaran of Mizuho said it was “unthinkable even a year ago” – but that was changed by the outbreak of coronavirus. Thailand’s lese majeste laws prohibit the insult of the monarchy or the slander of the king, and are among the strictest in the world. Violators can face up to 15 years in prison.
“The economic strain of the pandemic did not survive even the sacred Thai monarchy,” he added.
– CNBC Yennee Lee contributed to this report.