Continued strife affecting small business-owners and may cut tourism growth, already down 10 percent this year.
Thailand’s prime minister has decided to dissolve parliament and call early elections in an effort to defuse a political crisis, but opponents of her government have pledged to continue their protests.
Yingluck Shinawatra, who won a no-confidence vote in parliament late last month, made the announcement in a televised address on Monday.
An official of the country’s polling commission said the election will probably be held on February 2, 2014.
“At this stage, when there are many people opposed to the government from many groups, the best way is to give back the power to the Thai people,” she said.
“The Thai people will decide.”
However, Suthep Thaugsuban, leader of the protest movement, said he would not end his demonstrations despite the announcement.
“Today we will continue our march to Government House. We have not yet reached our goal. The dissolving of parliament is not our aim,” he told Reuters news agency.
He has repeatedly said he did not want a new election but wanted a vaguely defined, unelected “people’s council” to run the country.
Earlier, Al Jazeera’s Wayne Hay, reporting from Bangkok, said “the opposition wants the government gone, not the resignation of Yingluck”.
“They want the whole Shinawatra family out of politics,” he said.
“Her brother Thaksin is accused of corruption, therefore people believe his family, including his sister, Yingluck, is corrupt.”
Monday’s demonstrations come one day after the main opposition party resigned from parliament en masse, in advance of what they called a “final showdown” against the government.
The people who will be going home empty-handed are those in the Thaksin regime.
Thailand has been plagued by political turmoil since the army toppled Thaksin in a 2006 coup.
The conflict pits the Thai elite and the middle-class, against Thaksin’s power base in the countryside, which benefited from populist policies designed to win over the rural poor.
“We will rise up,” Suthep said.
“We will walk on every street in the country. We will not be going home again.”
Despite Yingluck’s call for a new parliamentary election, the ruling Pheu Thai party is worried of an opposition boycott, without a credible outcome, Al Jazeera’s Heidler said.
Since the latest unrest began last month, at least five people have been killed and at least 289 injured.
Violence ended suddenly last week as both sides paused to celebrate the birthday of the nation’s revered king, who turned 86 on Thursday.
The crisis boiled over after Yingluck’s ruling party tried to pass an amnesty bill through the legislature.
Critics said it was designed to bring back Thaksin, who lives in exile in Dubai to avoid jail time, for a corruption conviction he said was politically motivated.
Abhisit Vejjajiva, leader of the Democrat party and a former prime minister, said Yingluck’s government had become “illegitimate” since then, and his party had no choice but to pull out of the lower house.
“The solution to our current problems needs to start with the showing of responsibility,” Abhisit said.
“The prime minister has never showed any responsibility or conscience.”
The minority Democrats – who are closely allied with the protesters – have not won an election since 1992, and some of their leaders appear to have given up on electoral politics as a result.