July 14, 2008
Bangkok - Politics is somehow hurting Thai economy which is already hit by soaring inflation, energy prices and low investment, according to analysts.
Businesses are now reluctant to invest in the country while consumers have cut their spending.
"The instability of the current government caused by the ministers has devastated confidence in the Thai economy among investors and consumers," said Aat Pisanwanich of the University of the Thai Chamber of Commerce.
The cabinet reshuffle is expected to inevitably affect major infrastructure projects and new economic policies.
Inflation in June hit a new 10-year high of 8.9 percent, and experts fear economic growth could be slower than the 6 percent predicted by the government.
Pongrat Ratanatavanananda, vice president at Bua Luang Securities, said the political situation made it hard for Thailand to cope with the shaky world economy.
Thai economy will be hurt when the government chooses either to reshuffle the cabinet or dissolve the parliament.
However, Kavee Chukitkasem, assistant managing director at Kasikorn Securities, said some Asian investors, particularly from Japan and Singapore, don't appear too worried by the political crisis.
Exports which account for 60 percent of Thailand's economy can slow down later in the year.
