The political movement from the anti-government group could put Thailand under heavy political strain, something which could hamper an economy already feeling the effects of the coronavirus pandemic.
A protest organized this past Saturday by student groups was the largest street demonstration since February.
It is estimated that more than 2,000 people joined the protests to demand the rewriting of the constitution, the dissolving of parliament and calling for a new election, and stopping the harassment of the people by the authorities.
Two other protests were also staged over the past weekend. A student, activist and pro-democracy alliance held a protest in Chiang Mai and Ubon Ratchathani to demand the same thing.
Protesters gave the government two months to address their concern or faced prolonged and larger protests.
Combining pressures
Experts fear that political uncertainty would lead to further loss of confidence for all sectors at a time when the economy was already contracting from the coronavirus pandemic.
Pipat Luengnaruemitchai, Assistant Managing Director, Chief Economist and Chief Investment Officer of Wealth Management of Phatra Securities Plc, told Thai Enquirer that the beginning of a political movement would affect the confidence of investors.
“The situation is already severe from the economic contraction from the COVID-19, the possibility of the continuing protest will impact people’s confidence to invest in the market,” said Pipat.
“The key point is when investors lose their faith in the market it is likely to halt economic activities and this leads to economic contraction.”
Thammarat Kittisiripat, an economist from TISCO Securities Plc, said it might be too early to calculate any consequences resulting from the protest right now, but it will induce a downturn to the economy if the situation doesn’t get better.
“The uncertainty from political movement will increase the risk of possible damage to the economy as it leads to contraction in business activities.”
As of now, The Bank of Thailand (BoT) stated that it will take about 2 years for the economy to recover to pre-covid levels. The economy will shrink by 8.1 per cent with the sharpest contraction seen in the second quarter this year.
The Bank of Thailand also said the tourism sector would take several years to reach the level of 40 million visitors again.
According to the Central Bank, Thailand will only see 8 million foreign tourists this year, an 80 per cent drop from 39.8 million last year.
