Thailand’s economy will recover quickly if the political unrest that killed 27 people last month ends “peacefully,” central bank Deputy Governor Bandid Nijathaworn said today.
“If the situation eases in a peaceful manner, that will benefit the economic outlook” as tourism, consumption and confidence rebound after being hurt by the turmoil, Bandid told reporters in Bangkok.
Prime Minister Abhisit Vejjajiva yesterday proposed holding an election on Nov. 14 as part of a reconciliation plan to end the nation’s deadliest political conflict in 18 years. Finance Minister Korn Chatikavanij said April 30 prolonged anti-government protests could reduce gross domestic product growth by as much as 2 percentage points this year.
The protest group, which supports ex-leader Thaksin Shinawatra, has occupied part of Bangkok’s commercial district for about a month, causing many department stores to close down and forcing companies such as Ogilvy & Mather Group Holdings Ltd. and Philip Morris International Inc. to shift employees to temporary offices.
Bandid said inflationary pressure is expected to rise in the second half of 2010 after most of the government’s subsidy measures expire in June. Still, inflation won’t obstruct the economic recovery, he said.
“Core inflation is rising steadily,” Bandid said. “The central bank will use monetary policy to control inflation. We will keep core inflation within our target of between 0.5 percent and 3 percent.”
Thai consumer prices rose 3 percent in April, compared with a 3.4 percent gain a month earlier. Core inflation, which excludes fresh food and fuel prices, rose 0.5 percent last month, up from 0.4 percent in March, the Commerce Ministry said yesterday.