The Effects of Political Instability on Thailand’s Economy


An Hodgson, Senior Strategic Analyst, explains how Thailand has been gripped by political turmoil since the coup in 2006. Since the latest political unrest in May 2010, the economy has been adversely affected. A reduced amount of tourists have been traveling to Thailand, lowering the flight and hotel numbers. This negative impact on the Thai tourism industry is taking a toll on the overall GDP in Thailand.

Business confidence was also affected, with the BSI index experiencing the largest month-on-month fall since 1999. The consumer confidence index also fell – but experienced less of a decline in its most recent quarter than in 2009, mainly due to the Thai economy being hard hit by the global recession.

Due to political instability in Thailand, there will be more tourism arrivals in countries surrounding Thailand because tourists will direct their interests to outlying countries. Tourism agencies have reported booking cancellations in Thailand. Foreign investment will also be impacted, as investors will be looking at the political turmoil in Thailand and relocating investments to neighboring countries.

Read more about the political unrest in Thailand, and how it is effecting ASEAN countries.

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