Tread Carefully in Thailand’s Turbulent Waters

Thailand’s economy may be in for far more turbulence than anticipated after the March elections. Social unrest has risen and consumer confidence has sagged since the poll, which this month saw parliament return junta leader General Prayuth Chan-Ocha to power. Critics have denounced the election as rigged in favor of the pro-military camp, and foreign investors are holding back. They are right to take a wait-and-see approach.

On the eve of the March vote, I wrote that there would be only a temporary disruption in Thailand’s economic growth. The drag now appears more likely to be prolonged. Consumer confidence dropped to its lowest level in 19 months in May, and first-quarter growth was a paltry 2.8% from a year earlier. That was the economy’s worst performance since 2014, when Prayuth took power in a bloodless military coup. Now, rather than ruling with absolute power, he will have to lead a coalition government with a slim majority.