By Orathai Sriring
BANGKOK, Dec 1 (Reuters) - Thailand's economy may have its worst year in 2009 since the 1997/98 Asian crisis, as escalating political unrest is hurting tourism and investment at a time when export growth is collapsing due to the global slowdown.
Officials and private economists are cutting their 2009 economic growth projections, many saying that even 2 percent growth will be an achievement, especially after the blockade of Bangkok's main Suvarnabhumi airport since Tuesday.
Finance Minister Suchart Thada-Thamrongvech said the political turmoil had shattered business confidence and it would take a year at least to recover.
"The economy may not grow at all, or just 1 to 2 percent next year," he told Reuters.
Deputy Prime Minister Olarn Chaipravat went a step further, saying there could be no growth next year or even a contraction.
In comparison, the Thai economy shrank 10.5 percent in 1998 because of the Asian crisis. The weakest performance since then was 2.1 percent growth in 2001.
Private economists are also reviewing their figures.
"We have been in the process of shifting down our 2009 outlook ... to closer to 2 percent growth from 3.1 percent," said Forecast economist Carl Rajoo in Singpore.
"If a good solution to the problem happens, then confidence will return. But the problem is, a good solution doesn't look like it's going to come soon," Rajoo said.
An official at state planning agency NESDB, which compiles the GDP data, said its 2009 forecast might be too high.
"For 2009, it now looks challenging to achieve the lower end of our 3-4 percent growth forecast, given the fact that the fallout from the airport dramas would still be quite evident in the first quarter, which is still our high (tourist) season."
Anti-government protesters have ignored a police order to end their blockade of the $4 billion Suvarnabhumi airport, which handles more than 100,000 passengers and outbound cargo worth around $85 million each day.
Standard & Poor's cut its outlook on Thailand's sovereign credit rating to negative from stable on Monday, saying that recent events had increased the risk of widespread violence and damaged medium-term economic growth prospects.
TOURISM TO SUFFER
Bank of Thailand chief economist Amara Sriphayak said the tourist sector could lose 140 billion baht ($4 billion) in revenue next year, or 1.5 percent of GDP, if the political strife continued to the end of the year.
Deputy Prime Minister Olarn said the damage to Thailand's image could cut tourist arrivals by half in 2009 from the 13.5 million now expected this year, which would itself be down from 14.5 million in 2007. A million jobs were at risk, he said.
Tourism directly employs 1.8 million people and brings in the equivalent of 6 percent of GDP.
The prolonged closure of Suvarnabhumi, which can handle 3 million tonnes of cargo a year, would do serious damage to the export-driven economy. Exporters are struggling to find ways to get perishable goods and essential components to customers.
The Board of Investment estimated losses of 10 billion baht a day from a huge cargo backlog due to the airport closure, and it said this had put 200,000 jobs at risk.
"The airport closure has caused us more than 100 million baht already and affected about 20,000 jobs in the sector," said Jade Meyanyieam, president of the Orchid Exporters Association.
Suvarnabhumi manager Serirat Prasutanond said restarting the airport might take at least a week once the sit-in ends.
It will take much longer to rebuild trust.
"Nobody would put their money into a bank surrounded with negative news -- the same applies with investments," said Nandor von der Luehe, chairman of the Joint Foreign Chambers of Commerce in Thailand, which represents 10,000 foreign companies.
"Even after resolving the political standoff, it will take time to rebuild the reputation of Thailand."
Economists feared a long-term hit from the blockade.
"Even if the airport reopens, who can guarantee that something like this won't happen again? Who can really say this is a one-off thing?" said Charl Kengchon, an economist at Kasikorn Research Centre.
"The country's credibility is completely gone." ($1=35.60 Baht) (Additional reporting by Ploy Chitsomboon and Arada Therdthammakun; Editing by Alan Raybould)