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Bt490 bln loss caused by political stalemate, NESDB warns of jobless rise

Political unrest and delays in government investment recently prompted the agency to cut this year’s growth forecast to only 3-4% from 4-5% predicted earlier.

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Rangsit University’s Centre for Economic and Business Research for Reform indicated that the ongoing political stalemate has already damaged the country to the tune of more than Bt490 billion.

Anusorn Thammajai, dean of the Faculty of Economics, said the ongoing political situation has led to losses of investment opportunities, while during the whole year the country could lose as much as Bt1 trillion,

Political unrest and delays in government investment recently prompted the agency to cut this year’s growth forecast to only 3-4% from 4-5% predicted earlier.

The unfavourable prospects will eventually affect employment and people’s incomes, the agency said. However, it remains fortunate that recovering exports will give the country an economic lifeline.

The NESDB yesterday reported unemployment in the fourth quarter of 2013 stood at 257,900 or 0.65% of the workforce of 39.4 million compared with 190,245 or 0.48% in the same period in 2012.

In 2013, the unemployment rate averaged 0.72%.

The National Statistical Office said household income averaged 25,403 baht a month in the first half of last year, up by 4.6%, while average household expenditure was 19,259 baht, up by 5.12%.

Household debt for the period averaged 159,492 baht, up by 8.7%.

The political situation has affected the Thai economy in Q1 to grow negatively and could continue until Q2. The Thai economy in Q1 therefore could grow only 0.5 per cent, 0 per cent, or at -0.5 per cent in the worst case scenario. Now it is suggested that 2.5 per cent growth is the best case scenario, he said.

In addition, Thailand could lose its opportunity to become the centre of the ASEAN Economic Community (AEC) which is to take effect next year and the country could also face an economic downturn next year.

According to Mr Anusorn, if a government can be formed within April, parliament can be convened and political tensions ease without further major violence, the economy could grow 2.5 per cent. There is a 25 per cent likely chance such situation could happen, he suggested.

However, if the 2015 budget cannot be processed, or there is a Constitution Court ruling or a decision of the National Anti-Corruption Commission concerning the political situation and/or there is a coup in the second half of the year that leads to anarchy, the economy would possibly contract by -0.5 per cent. The country would enter a political crisis-driven recession, with a likely chance to happen at 45 per cent, Dr Anusorn noted. (MCOT online news).

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