Growth momentum lacking: UTCC

The university's Economic and Business Forecasting Centre yesterday said the country was facing double negative impacts - global financial meltdown and internal political turbulence - and that economic growth was being pulled down dramatically.

In the worst-case scenario, the centre said it was possible that economic growth would fall below 4.5 per cent this year if the political turmoil sparked serious violence.

"Exports, which are a major factor driving [growth in the Kingdom's] gross domestic product, will show slower growth next year, while tourism will also be hit. Travellers will lack the confidence to travel here, because of the political turmoil and concerns for their safety," said centre director Thanawat Polvichai.

He said Thailand's economy was expected to grow at the lowest rate in almost a decade next year, with expansion expected to reach only 3.5-4 per cent. This will be due to a lack of momentum to drive growth from both the public and private sides of the economy.

As a result, the country's unemployment rate can be expected to increase next year, affecting graduate students and unskilled labourers in particular.

Pramon Sutivong, chairman of both the Board of Trade and the Thai Chamber of Commerce, said to ensure continued economic growth, the country's political conflict had to be solved as quickly as possible.

"I cannot say exactly what is the best solution. But I would accept a majority decision if it would pave the way for a peaceful situation soon," he said, adding that it was hard to say whether dissolution of the Parliament was the best way to solve the situation.If the same party became the government again, then the conflict might never end.

Dusit Nontanakorn, the chamber's vice chairman, said the violence and the government's moves had created a "very terrible image" for the country.

"Foreign travellers and investors are hesitating and afraid to visit Thailand, because of the violence they see in the media. The government must stop its brutality. If it cannot solve the problem, it must consider allowing another administration to take over," Dusit said.