The death of Thailand’s king on the October 13th, 2016 will take place a huge impact on the country and its economy. The King Bhumibol Adulyadej was the world’s longest ruling monarch who ruled the country for 70 years. He took the reign in his hands in the year 1946 and ruled for seven decades until his death at the age of 88.
The crown prince Maha Vajiralongkorn would be officially the next king but it might take few months before the coronation happens. The prince is not so popular in the public and the elites loathe him.
The King Bhumibol Adulyadej’s death is going to impact the economy in many ways.
Baht and the Capital Market fall
The Baht may see a downfall in short term but is expected that the Bank of Thailand will intervene if required for supporting the local currency.
The markets may dip as the investors will look for signs of political stability in the country. The country has had a history of attempted coups around ten in the lifespan of King Bhumibol Adulyadej. The investors may watch for the Crown Prince Vajiralongkorn to be a stable leader of the economy and stay out of the risk of investing in Thailand till then. Thailand has already been shifting slowly from people ruled economy to a military-civilian mixed rule which the world is watching.
Consumer sentiment is down
Thai consumers will put less money in bigger commodities like cars and large household appliances over the first few months being the mourning period for them. This is causing a major loss to the retail stores. The sentiments of people are also down as they are not optimistic about the country’s future.
Business sentiment is seeing a fall
The consumer sentiment is down and that makes fewer purchases of big items. The sellers will take a hit because of this. The profits will reduce and any addition in capacity would be delayed. However, the good news is that manufacturers like those who manufacture for automobile companies for Japanese would not be in affected much. Out of the last years $395 billion GDP of Thailand, 70% came from the exports. The economy might get affected only when the countries importing Thai products reduce demands and in the last few months the world market rates are falling due to decreasing demands.
Unstable relations of monarchy and government
The government is increasing the security so that people do not use the king’s death for creating political chaos that has been seen happening in Thai politics. The crown prince and the government have to discuss new ways of collaborating and working together for the welfare of the country and its people.
Things bounce back after may get back to normal in some time
The end of the monarch may not affect day-to-day lives in the long term. All Government units will work separately and autonomously like the monetary authority Bank of Thailand. The last king has rebuilt the economy like that so that the economy does not take a hit in anyone’s absence.