Following a statement on Sunday from palace officials on the Thai king’s worsening health, its stock markets and currency have dropped rapidly amid fears that the world’s longest-serving monarch’s death could herald instability for the country’s already slowing economy.
On late Sunday, the Bureau of Royal Household revealed that 88-year-old King Bhumibol Adulyadej’s condition was unstable, following hemodialysis treatment. While the king has been in and out of Bangkok’s Siriraj Hospital for the past decade for various ailments, Sunday’s statement was a marked departure as the bureau only usually informs the public about Bhumibol’s improvement.
The news rattled Thailand’s stock exchange on Monday, but it took a further tumble Wednesday when local news reported that Prime Minister Prayuth Chan-o-cha had canceled government plans and flown back to Bangkok in a helicopter.
Its main stock index, SETI, has dropped by 6.5 percent since Monday to 1,406.18 by Wednesday afternoon — its lowest closing in almost six months. Its currency has also suffered, and is now valued at 35.71 Thai baht to the dollar, instead of the usual 34.8 baht to the dollar.
On Wednesday, anxious Thais donning pink shirts — a color considered auspicious for the king — waited outside Siriraj Hospital to pray for the king’s return to health. As of 6 p.m. Wednesday, there was still no announcement on his condition.
Greatly revered by Thais, the issue of royal succession after Bhumibol’s death has been the center of controversy in recent years, given the country’s strict lese majeste laws.
These laws make talking about the king publicly — in either a positive or negative light — a highly sensitive issue, which is why the uncertainty over his health is reflected now in the economy, said Krystal Tan, an economist with Singapore-based Capital Economics.
“This uncertainty itself is creating a lot of concern among investors, that’s why we are seeing the Thai market take a pretty big hit in the last few days,” she said. “The fear is that people are just not sure [what happens next] and it could intensify the existing divide in the country and trigger renewed unrest.”
While Bhumibol is perceived as a unifying force in the country, the symbolism of his position was harnessed in the political sphere during the lead-up to the 2014 military coup, which came after prolonged violent demonstrations between supporters of two bitterly divided political parties.
Thailand’s economy took a hit after the coup, and tourism, one of the main drivers of the economy, declined significantly, along with consumer spending. The number of visitors has since rebounded and is expected to reach record highs in 2016 despite terrorist bombings earlier this year.
Tan said Thailand’s economy has proved resilient to these shocks, but cautions that this “relative calm” could be short-lived if the king’s death resulted in any political discord.
“Thailand is one of the slower growing economies in the region already, so if we were to see renewed instability, it would set Thailand back even more,” she said, adding that the king’s reign of 70 years makes it hard to predict how the mourning period would go. “If there is widespread violence, then things will go downhill.”