Thai economy faces slowdown over coup

Bangkok, September 25:

Thai stocks on Monday recovered for the first time since the coup against premier Thaksin Shinawatra, but analysts warned the bloodless takeover could dent economic growth already hit by months of political uncertainty.

The Stock Exchange of Thailand (SET) composite index rose 1.41 points or 0.21 per cent to close the morning session at 683.12 after falling to a two-month low on Friday in the wake of the late-night coup on September 19.

But analysts said the coup, which capped months of political turmoil in the kingdom, created more uncertainty over the future of Thailand, raising concern among business leaders and investors over a slowdown in the country’s economy.

“In the eyes of foreign investors, the coup was a blow to democracy. Most foreign investors were surprised by the coup. They did not expect this to happen,” said an economist who declined to be named.

“After the coup, there was more uncertainty. We cannot see the direction of Thailand, and the coup would likely dampen consumer spending and slow down economic growth.” Vallop Tiasiri, president of the Thai Automotive Institute, a state-funded agency that promotes the car industry, said he expected a slump in investments due to mounting political uncertainty.

“In the world of business, uncertainty means high risk” for major investments, Vallop said. “During the past year, everybody was taking a wait-and-see stance before making any big investment decisions, and they have to wait again,” he said.