Protests could impact economy

30/4/2010(AFP)—BANGKOK – Thailand’s finance minister warned on Friday that if mass street protests in the capital last until the end of the year they may reduce 2010 economic growth by two percentage points.

‘The rally has already affected gross domestic product by 0.5 per cent,’ Korn Chatikavanij told reporters during a visit to Bangkok’s Silom business district, on the edge of a protest site in the capital’s commercial heart. Growth was previously predicted to reach 4.5 per cent this year.

Korn predicted Thailand’s first quarter growth – to be officially announced on May 24 – will hit nine per cent year-on-year, in line with the central bank’s prediction and on the back of economic recovery in Europe.

But he said the ‘Red Shirt’ demonstrations would hit second quarter growth, in particular the vital tourism sector, but also consumer spending and investment.

Mr Korn said the Bangkok protests had now triggered falls in visitor numbers on the southern tourist isle of Phuket, with advanced hotel booking figures now at only 12 per cent of occupancy.

The central Bank of Thailand has forecast tourist arrivals will be down seven per cent for the rest of the year, compared with last year’s figures.