Downside growth prospects for Thailand as political drama continues

BANGKOK - In the latest twist in Thailand’s ongoing political drama, Prime Minister Yingluck Shinawatra today announced the dissolution of Parliament to pave the way for new elections “as soon as possible.” Violent protests have gripped the capital city in recent weeks.

However, given deep-seated conflicts between the incumbent Puea Thai party with its support from rural areas, and the opposition Democrat party, it is unlikely that new elections will quell political turbulence any time soon. In th meantime, the economic damage is mounting as investor sentiment and tourism inflows weaken. BBVA Bsank says it foresees significant downside risks to its 2013 and 2014 GDP growth estimates of 4.2% and 5.0% respectively. www.bbvaresearch.com (ATI).