Coup Adds to Thailand Economy’s Struggles

The military coup has stirred yet more uncertainty, increasing the difficulties facing the country’s economy after months of antigovernment protests.

BANGKOK — The military coup in Thailand has stirred yet more uncertainty here, increasing the difficulties facing the country’s economy after months of antigovernment protests.


Even as Thai Gen. Prayuth Chan-ocha said the military’s aim was to create a “genuine democracy,” businesses were being impacted by the 10 p.m. to 5 a.m. curfew imposed after the coup. “All major department stores and malls in Bangkok are now closing at 8 p.m., instead of 10 p.m.,” said Joseph Yamdee, the top manager at the world’s largest international serviced apartments conglomerate Ascott. “Our occupancy rate is down to 60 percent, mainly due to fears of first-time visitors. When it comes to malls, they are still packed. We — Thais — are really a resilient nation.”

The Thai economy was on the brink of recession before the coup, with gross domestic product shrinking 2.1 percent in the first quarter of 2014 from the previous three months. Consumer confidence is low, and amid travel warnings from various governments, the number of foreign visitors is falling rapidly.

“This is an absolute tragedy,” lamented the manager of one large international hotel group, who requested anonymity. “Some of our properties in Bangkok are now running at 20 percent occupancy rate.”

Few people wanted to go on the record to discuss the coup. But two managers at luxury boutiques in the prestigious Paragon Mall confirmed that there were hardly any purchases made during the days following last week’s coup. One of them declared: “From now on, nothing is really certain or predictable.”

This was at least the 12th coup since the constitutional monarchy was established in the Thirties, and the second one in which Prayuth has been involved.


The coup followed months of instability as protesters against the government of Prime Minister Yingluck Shinawatra occupied several key business areas of Bangkok, including the major shopping thoroughfare of Sukhumvit. They blocked entrances to the lavish shopping centers and malls like Gaysorn, Paragon, Central World, Emporium and others, disrupting tourism and shopping activities. Prior to the coup, the protesters had decamped to the vast Lumpini Park, but now, even those hard-core demonstrators have dispersed. Many of them are obviously seeing the coup as their victory.

One benefit from the coup for the retail industry is that, at least in Bangkok, consumers regained access to the shopping district. Shoppers are able to stroll on the marble and granite floors, viewing Versace, Prada and other luxury brands, as well as the latest models from Lotus, Rolls-Royce and Ferrari on display in most of the upmarket malls.

Most of them come simply to look, though, as most retailers agreed that, even before the coup, consumers weren’t buying as much as they used to. At Marc Jacobs’ boutique, located near the entrance to the Paragon Mall, one of the biggest in Southeast Asia, a supervisor, Varinrat Chiamnukul, said, “There was an enormous drop in sales during the recent wave of protests. Then, after the demonstrators left, customers began returning back to malls in great numbers. But sales are not up as we expected they would be. Thai people, as well as foreigners, are now simply hanging out in shopping malls and department stores, doing window-shopping. But they are still buying very little.”

At the Silom Complex shopping center, several miles from Paragon Mall, the situation didn’t appear any better. Nipaporn Seangdee, a supervisor at Viera by Ragazze, a Thai brand of leather fashion apparel, was only cautiously optimistic. “Before the protest, our boutiques were always overflowing with customers, as we are offering high-quality and very unique leather goods, from shoes to purses. Our clientele consisted mainly of foreigners. During the protests, sales decreased sharply, as many non-nationals canceled their trips to Thailand. In May things are much better, and some foreigners are back, happy that most of the protesters went away. Those demonstrators who are still rallying at Lumpini Park are almost entirely out of sight. But things are not as good as they were before the riots, although Chinese visitors are now coming back again, and so are some Westerners. How should I put it? Things are better now; they are good… but definitely not as good as before.”

Udom Suphpathom, marketing communication director of the Emporium Shopping Complex, tried to remain upbeat: “[In the] last month, things have been good. The improvements are not dramatic. Sales increased, but definitely did not double or triple. However, we are predicting steady growth, and our targets for this period will be met.”

But Uly — a Philippine-born real estate agent who works for Bangkok Luxe Property, which specializes in luxury real estate along the banks of the Chao Phraya River — explained that Bangkok had been badly hit for months by political crisis and economic depression.

“We saw many deals canceled at the last minute. Foreigners are scared to invest, even to visit, as there is too much violence now in Thailand,” said Uly, who declined to give his full name. “We are also experiencing great uncertainty here. Condominiums that used to sell for $300,000 now go for less than half, and even then the price is still negotiable. Of course this is affecting all other sectors of the economy, including luxury retail.”

Salinthip Chaiphan, a Bangkok-based events organizer who was educated abroad, admitted her shopping patterns have been changing due to the economic uncertainty. “I have recently become a much more conservative shopper. Before I would just buy what I liked, but now I think twice before using my credit cards,” she said. “And to be frank, Bangkok is no longer a shopping paradise. It used to be, but now most brand garments are cheaper to buy in Europe, the United States, even in Japan. There is a very high tax on luxury goods here in Thailand. Many people who can afford it go shopping for brand luxury good to other countries.”