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Bangkok - Thailand's economy probably shrank in the first quarter as exports remain weak and domestic activity has been depressed by months of political unrest, which threatens to tip the economy into recession.
The country has been run by a caretaker administration with limited fiscal powers since December and there is no end in sight to the crisis as protest groups seek to install an unelected government.
A poll is expected to show gross domestic product (GDP) in January-March shrank by 1.6% from the previous quarter on a seasonally adjusted basis.
Technical recession
On an annual basis, growth was expected to be only 0.1%, the worst performance since a contraction in the last quarter of 2011 when the country suffered devastating floods.
The outlook for the April-June quarter and beyond is grim.
"Chances are we're going to see another technical recession in the economy, given that the second-quarter GDP number is likely to be rather poor as well," said Gundy Cahyadi, an economist with DBS Bank in Singapore.
"The longer the economy is without a functioning government, the more the drag to economic growth," he added.
Resilient
The political protests flared up at the start of November.
In the final quarter of 2013, the economy expanded 0.6% both on the quarter and from a year before.
Consumer confidence is at a 12-year low, tourists are staying away from Bangkok and public spending has been delayed. Many parts of the economy are feeling the pinch, even the property sector, which proved resilient during previous bouts of unrest.
"If the political crisis drags on until the end of this year, the overall sector could see a contraction of as much as 10%," said Rutt Phanijphand, chief executive of home builder Quality Houses.
The political turmoil is also hurting Thailand's big vehicle sector, which accounts for 11% of GDP and is the largest in Southeast Asia. Domestic car sales are falling and about 30 000 industry jobs have been lost his year.
Thai Airways reported a quarterly loss last week and expects more red ink in the second and third quarters as "we have been severely affected by the politics", said chairperson Prajin Juntong.
Tourism accounts for about 10% of GDP and visitors dropped about 5% in January-April from a year earlier.
Tourism
This month, the Tourism Authority of Thailand cut its forecast for 2014 tourist arrivals to 26.3 million, the lowest in five years, from 28 million.
Pornthip Hirunkate, vice president of the Tourism Council of Thailand, said the unrest had probably cost about $3bn in tourism revenue so far.
"If the unrest continues into the second half, it will hurt the late-year high season and we could see layoffs in a sector that employs more than 3 million people," she added.
