Political crisis takes its toll on Thailand’s economy

Thailand’s politicians “like to think of their country as the natural engine for growth in mainland South-East Asia”, says The Economist. “This year, it is acting as a brake.”

The five-month stand-off between the government and supporters of the opposition, whose violent protests eventually led to new elections that have just been annulled by the constitutional court, shows little sign of ending soon.

Ideally, says Capital Economics, the two parties would agree to respect the results of new elections, but “the threat of escalating violence has come back to the fore”. The ongoing political uncertainty means that the economic outlook continues to deteriorate.

Already, notes The Economist, the annual rate of GDP growth has been cut in half to 2.5%. Investment is down by 11%, consumer confidence hit a 12-year low. Tourism has fallen. Export growth has stalled.

A government attempt to beef up infrastructure through a $70bn spending spree has been put on hold indefinitely after a high court ruled it unconstitutional (the government had tried to borrow the cash through emergency legislation).

To cap it all, there is a severe drought in the north of the country. Thailand’s recurrent political turmoil has “become exhausting to watch”.

• Stay up to date with MoneyWeek: Follow us on TwitterFacebook and Google+

MoneyWeek magazine

Latest issue:

Magazine cover
Why you should worry about Greece

...and how to protect your wealth

The UK's best-selling financial magazine. Take a FREE trial today.
Claim 4 FREE Issues

From ADRs to Z scores – all the terms you wish you understood, but were too embarrassed to ask about.

Gervais Williams: if you want real dividend growth, buy small-cap stocks

Merryn Somerset Webb interviews small-cap stock expert Gervais Williams about how penny shares outperform blue chips 'again and again'.


Which investment platform is the right one for you?

When it comes to buying shares and funds, there are several investment platforms and brokers to choose from, with varying fees and charges. Find out which is best for you.


3 July 1767: Pitcairn Island is discovered


Pitcairn Island was spotted on this day in 1767 by 15-year old midshipman Robert Pitcairn, serving on HMS Swallow. It was marked wrongly on the ship's chart, and was promptly lost again.


Anatomy of a Grexit: how Greece would go about leaving the euro

Jonathan Loynes and Jennifer McKeown, economists at Capital Economics, look at the key issues and challenges of a Grexit, how it might be best managed, and set out a timetable for change.