Somprawin Manprasert, deputy dean of the faculty of economics at Chulalongkorn University, said gross domestic product (GDP) expansion is likely to be trimmed by about 0.2% if rallies stay peaceful, but would be immediately cut by as much as 0.5% if protests turn violent and lead to another military coup.
In the short-term, protests should not affect the confidence of foreign investors, he said, but foreign countries could advise citizens not to visit Thailand if rallies escalate, damaging the tourism sector during high season.
Benjarong Suwankiri, director of economic analysis at the Thai Military Bank, also warned that heightened political tensions would worsen the ongoing slowdown in domestic consumption, private investment and exports. Mr Benjarong said previously that anti-amnesty rallies would have little impact on the economy since disparate anti-government protest groups were uncoordinated in their efforts to oppose the blanket amnesty bill.
But after the House of Representatives approved the bill early Friday, he said the knock-on effect of the rallies could be more serious than first expected.
“The impact of protests is unpredictable because no one thought the Pheu Thai Party would rapidly push the controversial bill through parliament. We will have to wait and see what opposition groups do,” Mr Benjarong said.
If the anti-amnesty bill protests are prolonged, the impact on the economy would become increasingly critical over time, he said, adding that foreign investors are already concerned about political instability in Thailand, and conflict over the amnesty bill would further erode their confidence.
Meanwhile, an analyst at Krungsri Securities said on Friday that the passage of the blanket amnesty bill could severely affect the investment sector. If protests are prolonged or violent, it will have a damaging psychological impact on investors and the investment sector, he said.
The private sector is concerned ongoing political tensions will hamper economic expansion, because there is no sign that the conflict is likely be resolved, he added.
An analyst at KK Trade Securities echoed concerns about the legislation's impact on the investment sector, but said the blanket amnesty bill may yet be rejected by the Constitution Court.
Democrat Party Leader Aphisit Vejjajiva said his party will submit a petition to the Constitution Court seeking a ruling on constitutionality of the amnesty bill.
Democrat MP for Surat Thani Suthep Thuagsuban said the party will continue to stage a rally against the amnesty bill at Samsen Railway station until the legislation is withdrawn.