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Turbulent Thailand

Thai economy starts to feel pain from unrest

Shopping centers close early as mass transit shuts down

A pro-democracy protester flashes a three-fingered salute during a protest in Bangkok on Oct. 17. Authorities have shut down mass transit systems and set up roadblocks, bringing economic activity to a standstill.   © AP

BANGKOK -- Thailand's anti-government protesters are calling on citizens to withdraw their money from Siam Commercial Bank, whose top shareholder is King Maha Vajiralongkorn.

The bank's shares have fallen around 6% since the demonstrations began in September.

Businesses that advertise on television stations seen as sympathetic to the government have also come under fire. As a result, companies including food delivery giant Foodpanda have quickly pulled commercials.

With the authorities shutting down the BTS Skytrain and subways as well as closing off roads to quell the protests, economic activity is grinding to a halt. The latest unrest adds further pressure on the government, on top of the coronavirus woes that have pounded the country.

"Due to road closures, we are closing at 6:30 p.m. today," CentralPlaza Ladprao, a shopping complex on the outskirts of Bangkok, told customers Saturday. The closing time was three and a half hours early.

Thailand's King Maha Vajiralongkorn and Queen Suthida leave from Grand Palace after ceremony marking the fourth anniversary of the death of late Thai King Bhumibol Adulyadej in Bangkok on Oct. 13. The king is the top shareholder of Siam Commercial Bank.   © AP

CentralWorld, one of Bangkok's largest shopping facilities, also shortened store hours Thursday and Friday. Jewelry stores there, afraid that demonstrations would turn violent, quickly stashed their products away.

"On days when the protests take place, our sales go down 60% to 80%," a restaurant owner told Nikkei.

Japanese companies in Thailand are not immune. Tokyu Department Store closed four hours early on Friday and Saturday, when the intersection in front of the MBK Center, where it is located, was occupied by protesters.

For Thailand, which relies on tourism for around 20% of its gross domestic product, luring visitors back is crucial to economic recovery. The government is set to relax restrictions on long-term stays by foreigners from Tuesday. Yet extended unrest could scare travelers off. A man who owns multiple hotels in Bangkok said an impact on tourism will be inevitable if clashes between police and protesters turn violent.

Investors in Thailand are watching carefully. The SET Index has continued to fall since the latest round of protests began Wednesday.

"Concerns are rising as no one knows how the situation will end," Kasikorn Securities Senior Vice President Sorrabhol Virameteekul told the Bangkok Post. "We recommend that investors take a wait-and-see approach until there is a clearer direction for both domestic and external politics."

It is yet another round of turmoil for the Thai economy. According to a retail organization in the shopping district of Ratchaprasong, during the 2010 protests the district lost 174 million baht ($5.6 million at current rates) in a single day.

Some analysts expect the Thai economy to suffer a bigger decline this year than 1998, during the currency crisis, when GDP shrank 7.6%.

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