- POSTED: 19 May 2014 12:56
- UPDATED: 19 May 2014 13:01
Thailand's economy shrank 0.6 percent year-on-year in January-March, data showed Monday, as the kingdom's political crisis battered consumer confidence and frightened off tourists.
BANGKOK: Thailand's economy shrank 0.6 percent year-on-year in January-March, data showed Monday, as the kingdom's political crisis battered consumer confidence and frightened off tourists.
The contraction is the first since the last three months of 2011, when the country was hit by massive flooding. The National Economic and Social Development Board (NESDB) also slashed its growth outlook for 2014, forecasting 1.5-2.5 percent expansion, down from a previous estimate of 3.0-4.0 percent.
Consumers tightened their spending during the first part of this year "due to increasing concerns over the domestic political situation" that has seen nearly seven months of anti-government protests, a prime minister toppled and street violence that has left 28 people dead and hundreds more wounded.
Southeast Asia's second-biggest economy remains without a fully functioning government, cramping state spending and investment in key infrastructure projects and prompting the NESDB forecast reduction.
The Thai economy in 2014 "is likely to grow at a slow pace as a result of the economic contraction in the first quarter" while the "political uncertainty" will also limit expansion, the board said in a statement.
The kingdom had enjoyed a reputation as "Teflon Thailand" for its enviable record of economic resilience in the face of political upheaval in recent years as well as the floods in 2011.
But Fitch Ratings has warned that the country's "'BBB+" sovereign credit rating could be clipped if the political deadlock continues through the second half of this year.
Consumer confidence has slumped to its lowest level in more than a decade and tourist arrivals dipped by around eight or nine percent in February and March as foreign investors nervously watch the political crisis unfold.