Thai economy slows sharply in third quarter

Sun Nov 23, 2008 11:29 PM EST

BANGKOK — Thailand's economy slowed sharply in the third quarter, taking a double hit from prolonged political turmoil and the global financial crisis.

Gross domestic product, a broad measure of economic activity, grew 4 percent from a year earlier compared with the 5.3 percent in the second quarter, the National Economic & Social Development Board said Monday. The economy expanded 6 percent in the first quarter.

Agricultural production continued to grow strongly but other sectors of Southeast Asia's second-largest economy wilted. Deadly political violence in the capital, Bangkok, deterred foreign tourists and state expenditure fell as the political crisis paralyzed the government. Construction also contracted, and the global credit crunch hit exports.

"Major services sectors such as manufacturing, hotels and restaurants, transport and communications, and wholesale and retail trade showed slowdown growth due to severe effect of political turmoil and global financial crisis," the agency said in a report.

Since late August, thousands of protesters have occupied Government House in Bangkok, part of a campaign to topple the ruling party because of its close ties with former Prime Minister Thaksin Shinawatra, who was ousted as premier by the military in a bloodless September 2006 coup.

The political deadlock has erupted into deadly violence several times and Monday thousands of anti-government protesters were besieging parliament in what some characterized as a final showdown. The last time the group marched on Parliament, police efforts to disperse them resulted in running street battles. Two people were killed in the Oct. 7 violence and hundreds injured.

Compared to the previous quarter, the economy grew 0.6 percent in seasonally adjusted terms, slowing from 0.8 percent growth in the second quarter.