The spate of arson and bomb attacks in the seven southern provinces last week may have cost as much as 33.4 billion baht in economic losses, according to an estimation by Anusorn Tamajai, dean of Rangsit University’s Faculty of Economics.
Anusorn said revenue from the tourism sector, the country’s economic backbone, will shrink by 33.4 billion baht in the remaining third quarter as a result of the attacks.
He said he expects the attacks also to cause shockwaves in Thai financial markets, as investors become nervous that consumer confidence will take a knock, while foreign investors may sell their blue-chip stocks in the hotel, tourism, retail and other businesses based in the South.
Anusorn added that the attacks in the seven southern provinces have resulted in 50-percent cancellations of hotel bookings.
But Anusorn remains confident in the economy’s fundamentals and that Thailand should be able to maintain its economic growth forecast of between 3.2 percent and 3.5 percent this year, as the situation returns to normal and the country’s tourism sector picks up once the immediate impact has passed.
Thanawat Polwichai, director of the Centre for Economic and Business Forcasting of the University of the Thai Chamber of Commerce, gave a more modest estimate for the damage caused by the attacks, saying it is unlikely to run into tens of billions of baht. Thanawat said his estimate was based on inquiries made with the chambers of commerce in the seven provinces affected by the attacks.
The chambers did not regard last week’s attacks as an “extremely violent sabotage,” Thanawat said. He added the chambers believe the damage may be limited, given the current low tourism season.
“From my discussions with them, as long as there is no repeat of such attacks, the chambers are not too worried,” Thanawat said, adding they will meet to formally discuss and assess the losses.
Thanawat said the attacks will only affect tourism visits and consumption in the short term, provided there are no repeat attacks soon.
A steady recovery in the tourism industry is expected in the fourth quarter, which is the high season in Thailand.
He said the chambers believe the attacks were neither a terrorist act nor linked to the insurgency in the deep South. But Krisada Tansakul, president of the Thai Hotels Association’s Southern Chapter, insisted no signs of waning consumer confidence have come to light as a result of the attacks and that no hotel booking cancellations by foreign guests have been reported.
There were only a few worried Thai guests who had canceled their bookings following the incidents, Krisada said.
Some initial reports said the bomb blasts, which killed four people and injured 35, were the work of disgruntled political parties who were bitter about the referendum result in which most Thais supported the military regime’s draft constitution. More recent theories point towards a link with the southern violence.
The police have detained two men for questioning over the attacks.
Image credits: Bloomberg