Generally, the bomb attacks will slow the economy in the short term due to the cancellation of economic activities on New Year’s Eve in Bangkok and other large cities. In addition, people now dare not go out or do their shopping in crowded areas. Also, some countries such as Australia, Britain, Canada, and New Zealand have posted warnings against traveling to Thailand, resulting in some foreign tourists canceling their trips here.

However, the impact from the bomb attacks on the Thai economy will not be severe if they are assumed to be perpetrated by people in the ousted government due to the following reasons.

 The bombings will be deemed a short-term situation

The opinions from the government, academics, political analysts, and leaders in the army point toward the people who lost political power as the ones who are behind the bombings. This anticipation is likely to cause no continual damage as in the 3 southern most provinces because it is only the attempt to discredit the government by creating an impact.

 People’s awareness of previous situations

Previously, most people were aware of the conflicts caused by political factors, such as arson attacks on schools in the Northern region; the “undercurrent,” who are underground Thaksin supporters wanting to destabilize the present military government, and the rumor about violence that might happen at the beginning of 2007. Therefore, having bomb attacks is not a new thing.

 The bombings did not have much impact on key economic variables

If so, Thailand’s economic conditions in 2007 will not change much because the expectations of different work units have also not changed. Because the variables impacted by the bombings do not highly affect Thailand’s 2007 economic workings. Previously, political factors decreased investment and slowed consumption from the previous year, while tourism has been impacted by a stronger baht. Therefore, the violence from the bombings will not worsen these variables that much.

As for economic activities, they will not stagnate for long because people need to consume. People might shop more at smaller stores or shop with less frequency but larger quantities each time. As for investors, they need to invest to replace the old engines. And tourists may change their destinations to other provinces instead.