Political tensions could take as much as 200 billion baht off the economy in the worst-case scenario of the situation becoming prolonged into next year and turning violent.
Sauwanee: 150 billion baht off GDP
In this case, the economy will expand in a range of 3% to 3.2% this year and 4.5% to 4.7% next year, said Assoc Prof Sauwanee Thairungroj, president of the University of the Thai Chamber of Commerce (UTCC).
Kasikorn Research Center (K-Research) predicts 0.5 to one percentage point will be shaved off if political chaos occurs.
The UTCC's Center for Economic and Business Forecasting last month slashed its gross domestic production (GDP) growth projection to 3.5% from 4.3% previously and projected next year's growth in a range of 4.6% to 5.5%.
Despite the retreat of the House of Representatives over the controversial amnesty bill, the political situation is escalating as protesters refuse to back down.
More people are protesting, and the opposition Democrats have given an ultimatum to the ruling Pheu Thai Party to scrap the bill by Monday even though some senators have announced the Senate will reject it and Pheu Thai MP and House whip Amnuay Khlangpha has promised the party will not reintroduce the bill if the Senate does reject it.
The Senate will deliberate the bill today.
Assoc Prof Sauwanee forecasts if the rallies continue until year-end and become violent, it could cost the economy at least 150 billion baht, while GDP growth for the year would come in at 3% to 3.2%.
If the rallies are peaceful and called off in the next week or two, the economy will not be affected and the expansion rate will be 3.5% this year and 5.1% next year, she said.
However, if the protests run until year-end without violence, the economic growth rate will be 3.3% to 3.4% this year and 5.1% next year.
Ms Sauwanee said the UTCC surveyed 1,200 people and found 65.4% agreed with the protests, while 22.5 were undecided.
Sixty-six percent also worry the situation will be prolonged like in the past, while 77% believe the situation is likely to turn violent.
Thanavath Phonvichai, UTCC's vice-president for research, said the most likely scenario at the moment is the rallies will be peaceful until the end of this year.
Even though the effect of the protests has not yet been felt, the consumer confidence index, at an 18-month low last month, suggested an economic impact cannot be ruled out.
The index was at 76.6 points last month, down from 77.9 in September, due to the current political uncertainty.
Based on a poll on 2,241 respondents in October, confidence in the overall economy was at 66.6 points compared with 67.9 a month earlier, while the figures for job opportunities were 69.4 from 70.6 and future income 93.7 from 95.1.
``Consumers are quite worried about the escalating protests. They're spending more time following the political issues, and since they are not sure about the future, they're not spending large sums on unnecessary items,'' said Mr Thanavath.
Charl Kengchon, the managing director of K-Research, said 0.5 percentage points will be taken off if the rallies are similar to the 2010 Ratchaprasong demonstrations, while a full point will be the case if they intensify to the airport-seizure scenario in 2008.
But if the protests are peaceful throughout the year, around 0.1 to 0.2 percentage points will be shaved off this year since the ongoing political tensions have shaken confidence of consumers and investors at a certain level, said Mr Charl.
K-Research forecasts the 2013 economic and export growth rates at 3.7% and 3.5%, respectively.