Large-scale anti-government protests had gripped Bangkok for more than six months since November last year and spread the spillover effects, hurting investment, tourism and consumption. Manufacturing production contracted in March for the twelfth consecutive month by 10.4 percent year-on-year and consumer confidence fell in April to its lowest level in almost thirteen years.
Year-on-year, the economy shrank 0.6 percent in the first three months of 2014, the weakest rate since the end of 2011.
The state planning agency cut its 2014 GDP growth forecasts, saying the economy is likely to grow at a slow pace as a result of the economic contraction in the first quarter while the expansion for the rest of the year tends to be constrained by the political uncertainty which has caused a further delay in the new government formation than earlier expected. The lingering political unrest and the delay in the government formation will obstruct the budget disbursement, the implementation of key economic measures, the preparation of the FY2015 budgeting process, and continue to dampen consumer and business confidence and thus private consumption and investment. Moreover, export sector seems to pick up more slowly than previously anticipated due to a slow recovery of the global economy particularly Chinese and other Asian economies. Hence, contributions from exports are likely to be lower than previously estimated.