Tourism revenue to take a hit as political woes scare foreigners away

However, the TAT's estimates are better than those forecast by the private sector, which expects to see about 1 million foreigners keep away, leading to revenue loss of up to Bt70 billion.

Governor Phornsiri Manoharn is optimistic that if the crisis ends by the end of next week, the damage will be only Bt9 billion from the loss of 240,000 visitors.

"The worst-case scenario will hit this year's high season, resulting in the loss of about 840,000 tourists," she said.

Twenty countries have already issued safety warnings to their citizens about travelling to Thailand since a state of emergency was declared for Bangkok last Tuesday. Since then, hotel operators have experienced massive booking cancellations.

The state of emergency has also dampened the investment environment. The stock exchange has plunged almost 27 per cent from a 52-week peak of 884.19 points to end yesterday at 665.66. Foreigners have remained net sellers.

The Federation of Thai Industries (FTI) will meet today

to discuss the impact and sound out possible solutions.

FTI chairman Santi Vilassakdanont yesterday said 16 key industry groups had already been affected by the political chaos aside from tourism. Moreover, importers and traders are considering shifting orders from Thailand to other countries. Foreign buyers have also delayed their plans to visit Thailand for product surveys.

"Both the government and the People's Alliance for Democracy should take a step back," he said, adding that the state-enterprise employees' strikes had hurt exports, which generated 70 per cent of gross domestic product.

Federation of Capital Market Organisations chairman Prasert Bunsumpun said after an urgent meeting yesterday that the federation would urge the government to revoke the decree as soon as possible, in order to restore investor confidence.

"I would like all parties to find a solution as soon as possible. If the state of emergency is unnecessary, it should be cancelled," he said.

PTT had originally planned to issue Bt10 billion worth of bonds in the second half of the year but switched to mobile funds locally, due to the political turmoil.

Economists have urged all parties to reach a solution within a month, or else the prolonged turmoil could dampen government revenue and widen the budget deficit in the next fiscal year.

"Instead of grasping opportunity in the fourth quarter, we're facing a worsened economic situation. Everyone wants a conclusion that will benefit the economy," said Thammasat University Prof Praipol Kommsup.