A thai political tsunamiIt is quite amazing to see

Last year, due to political uncer¬tainties following the military coup in September 2006, Thailand's economic growth was the lowest in Asia, 4.8 per cent, while that of East Asian countries averaged 8.4 per cent.

Last week, the National Economic and Social Development Board (NESDB) announced that at best, Thailand's economic growth would be 5.2 per cent this year. That announcement reflects the reality that because of the ongoing political turmoil and other external factors, the chances of the country achieving its previous economicgrowth target of 5.7 per cent grows slimmer by the day.

The NESDB's forecast is evi¬denced by what the Thai business sector is now experiencing. Also last week, the Federation of Thai Industries estimated that unless the situa¬tion is resolved and stateenterprise workers returned to their jobs, the country could suffer a loss of Bt100 billion worth of industrial exports. Such a disruption in the flow of exports would also affect agricul¬tural products, which thus far have been the main driving force for Thai exports. This unfortunate develop¬ment is rather significant, since the export sector accounts for roughly half of the country's gross domestic product (GDP).

Meanwhile, the Thailand Convention and Exhibition Bureau announced the chaos had already cost an estimated Bt3 billion in lost revenue and business opportunities. The loss stems mainly from the can¬cellation of at least eight major inter¬national trade shows and confer¬ences that would have welcomed 30,000 foreign visitors.

The only time Thailand's tourism industry has been hit this hard was in the wake of the December 2004 tsunami. At that time, an estimated Bt40 billion worth of tourism rev¬enue was lost.

Meanwhile, investor confidence and consumer confidence remain fragile and domestic consumption is declining as the country battles unstable oil prices, high inflation and other external factors. All of this will affect public and private investment, borrowing, manufacturing, retail sales and perhaps even employment. To top it off, foreign creditrating institutions are keeping a close watch on Thailand's political developments and may downgrade the country's ratings if the situation drags on.