BANGKOK - Thai officials assessing whether to maintain a state of emergency, which business leaders want lifted, deferred their decision on Friday, hours after two people were wounded in a shooting at the site of anti-government protests.
The protests aimed at bringing down Prime Minister Yingluck Shinawatra have been going on for four months and are taking a toll on the economy, with consumer confidence at a 12-year low.
Twenty-three people have been killed, most of them in shootings and grenade blasts, since late November.
The political uncertainty is unnerving consumers and the violence is scaring tourists away from Bangkok. Lower spending is hitting automakers, property firms and hotels in Southeast Asia's second-biggest economy.
Surapong Techruvichit, president of the Thai Hotels Association, said the occupancy rate had plunged to 20 to 25 per cent in Bangkok in January-February from 70 to 80 per cent in the same months last year.
The end of the 60-day emergency, imposed in Bangkok on January 22 in a bid to contain the unrest, would be a good start for getting business back on its feet, he said.
"If it's lifted, I think we can get back the tourists within two weeks to a month," he told Reuters. "It won't be good just for the hotel industry but for all business."
But the head of the National Security Council said no decision had been reached and the situation would be assessed next week.
"We'll let our military and police intelligence units consider whether the emergency decree should continue or not," Paradorn Pattanathabutr told reporters.
The protests are the latest bout of nearly a decade of political conflict that has set the Bangkok-based royalist establishment against the political machine of Yingluck's brother, former premier Thaksin Shinawatra.
Former telecoms tycoon Thaksin was ousted in a 2006 coup and has been in self-imposed exile since 2008 to avoid a two-year jail term for a graft conviction he says was politically motivated. He is widely seen as the power behind Yingluck's government.
The main opposition party boycotted a February 2 election and protesters disrupted polls Yingluck's ruling party looked set to win. The protesters have lost faith in elections, which Thaksin's parties keep winning, and want to change the political system to end his influence.
The protesters have scaled back action over the past week, lifting the occupation of several main intersections, but several thousand are camping out in Bangkok's Lumpini Park, where shooting erupted in the early hours.
Police said a taxi driver and a female passer-by were wounded by shots coming from the park.
The military, which has a long record of intervention in politics, has declined to get involved this time and has instead urged the rival sides to talk.
However, soldiers are visible in Bangkok, mainly at bunker-like posts protected with sandbags and camouflage netting.
Yingluck expressed her fear that the intimidating-looking posts could further alarm tourists and as a result some have been decorated with pink flowers in pots.
"We've allowed this to soften up the atmosphere," Major-General Wara Boonyasit told Reuters.
Yingluck heads a caretaker government until polling begun on February 2 can be completed and parliament can convene, although both the prime minister and the election itself face various legal challenges.
One of the potentially most serious ones Yingluck faces is dereliction of duty brought against her by the National Anti-Corruption Commission over a rice-subsidy scheme that has failed, leaving hundreds of thousands of farmers unpaid and causing huge losses to the budget.
She has been given time to defend herself. The commission then has to decide whether there is a case to pursue and, if it goes ahead, she may be forced out of office.
Yingluck repeated on Friday that she has no intention of stepping down and was determined to defend democracy.