Bank of Thailand governor Prasarn Trairatvorakul on Wednesday warned street rallies against the bill could hit the economy if they escalate.
''If the political strife flares up, it will somewhat hurt the economy. The Bank of Thailand is monitoring the situation,'' he said.
Heightening political tensions are spooking investors, with the SET index tumbling 1.7% yesterday.
Tanit Sorat, secretary-general of the Federation of Thai Industries, said protests will likely escalate into violence, as the sides are walking different paths and unlikely to reach agreement.
A mass rally is expected after the opposition Democrat Party decided to call nationwide protests to oppose the bill, which is aimed at giving amnesty to people convicted of crimes linked to political incidents since the 2006 coup that ousted Thaksin Shinawatra.
Anti-government groups are concerned it could return Thaksin home a free man.
The International Court of Justice's ruling on the border dispute between Thailand and Cambodia over the ancient Preah Vihear Temple, set for Nov 11, could be another political threat.
''It's a great risk to the economy. If the situation escalates, it will worsen confidence in the industrial sector, which has already been slow,'' Mr Tanit said.
''The tourism sector, the only one that is performing well, will also be hit hard.''
The Thai Industries Sentiment Index dropped to its lowest level in 23 months in September at 90.4 points.
Sisdivachr Cheewarattanaporn, president of the Association of Thai Travel Agents, said he is very concerned about an escalation of protests.
''We hope violence will not occur. The protesters and the government should compromise in a democratic manner,'' he said.
Wallop Treererkngam, the marketing general manager at Suzuki Motor (Thailand), said he is concerned that conflicts will delay infrastructure development projects.
Boonchai Chokwatana, the chairman of Saha Pathanapibul Plc, Thailand's leading consumer conglomerate, said spending power will be eroded if the situation worsens.
Peaceful marches will have no effect since Thais are familiar with political rallies, but if anyone is injured, the shopping atmosphere will be affected immediately, he said.
Phaibul Kanokvatanawan, chief executive of The Mall Group, said the effect of the rallies depends on the number of protesters and locations.
If crowds march in Bangkok's central area, it will immediately affect public lives, business activities and spending power, he said.
Moreover, inner Bangkok is a shopping destination for foreign tourists, whose spending accounts for 40-60% of sales at a time of low spending power for Thai customers.
Any bad news regarding protests would trigger a panic that would damage the country terribly, as foreigners may cancel their trips to Thailand, especially over the festive season, Mr Phaibul said.
The central bank last week trimmed its forecast for Thailand's economic expansion this year to 3.7% from 4.2% due to longer-than-expected lacklustre domestic consumption and delayed export recovery.
Pongpen Ruengvirayudh, the central bank's deputy governor for monetary policy, said the political situation has affected investors' confidence, as reflected by yesterday's decline in the SET index, but it has not yet affected the baht.