The investors’ loss of confidence as well as foreigners’ growing concerns are the most visible impacts the coup d’etat has had on the Thai economy.

To avoid too sensitive developments in the securities and financial market, the coup leaders have asked the stock markets and banks to stop working on September 20, but they have still failed to prevent Thai Bath from devaluing on the world market.

The Thai Bath has dropped sharply in value compared to the US dollar since many investors decided to buy US dollars instead of Thai Baths.

Earlier, the Constitutional Court’s decision to abolish the results of the April election together with no confirmation of a new election previously slated for October have dented people’s confidence and domestic and foreign investments.

The tourism sector-one of Thailand’s hard currency earners, which is gaining momentum after the 2004 earthquakes and tsunamis, will likely be affected by political instability. Many countries such as the UK, France, Japan and Australia have asked their citizens to take precautions against risks.

The Indonesian Embassy in Thailand has called on its people not to visit Thailand at this time when Indonesian residents take no risk of going out. Many tourists who are fearful of the tense situation in Thailand have decided to leave the country which is considered a paradise of tourism in Asia.

A tourist says,”The political situation in Thailand is very complicated. We will manage to leave the country as soon as possible before airports are occupied or blockaded.”

The coup, whether it was forewarned or not, still came as a shock to the Thai economy which is declining after a series of incidents, including the earthquakes and tsunamis in 2004, insurgent bombings and uprisings in the southern region, and impacts of oil price hikes.

In early September, the Asia Development Bank (ADB) continued to lower its forecast on the Thai economy’s growth rate for this year and 2007 to 4 percent compared with Asia’s average growth rate of 7.7 percent. ADB cited the main reasons as political instability, oil price increase and high interest rate.

Last year, Thailand’s inflation rate hit its seven-year record of 4.5 percent. Early this year, the country ran up a trade deficit for the first time since the Asia financial crisis in 1998. The economic prospects are becoming gloomy after the Thai government failed to approve the State budget for next year.

However, some people remain optimistic that the Thai economy is just facing short-term impacts and will recover soon after the country establishes a new government, regardless of which party dominating the government.

Some analysts said that with its strong export potential, the Thai economy will be able to bounce back. Many Thai people seem cautiously optimistic when saying, “Things will be going right and the Thai economy will stand firm on its own.”

Global and regional economic leaders participating in the International Monetary Fund (IMF) meeting in Singapore have declared that they will closely follow developments in Thailand. In the IMF managing director’s opinion, there are no signs of negative impacts on the regional financial market. However, it is necessary to be cautious about political instability in Thailand as it may harm the economies in the region.