Thai businesses call for swift government formation

A speedy establishment of a new administration is of paramount importance, according to the business community amid ongoing political uncertainty.

Chookiat Ophaswongse, an honorary president of the Thai Rice Exporters Association voiced concerns over the nebulous political situation, indicating the future of Move Forward Party leader Pita Limjaroenrat as the next prime minister is uncertain, making the country vulnerable to tension. He said…

“The stock market is likely to remain volatile, and we will have to wait and see if there will be any changes in the political factions forming a government. Regardless of which parties constitute the next government, the business environment should improve once it is established.”

The current political void will likely persist until a new government is established. Foreign investors interested in Thailand could potentially adopt a ‘wait-and-see’ stance in this period, said Chookiat.

Adding to this, he insisted on peaceful political demonstrations to minimise impacts on the economy, thereby allowing rice exports to continue as usual. He estimated the average monthly export volume of rice to remain at 700,000 metric tonnes for the remainder of the year. Chookiat said…

“The private sector wants a government to be formed as soon as possible to build confidence among foreign investors. Having a stable government is crucial for maintaining confidence and dealing with budgetary issues, especially government spending, which can pose challenges for the economy.”

Sanan Angubolkul, the Thai Chamber of Commerce chairperson, expressed his optimism for dialogue and mutual understanding moving forward. He said…

“The continued delay in forming a new government will affect setting up a cabinet and announcing the policies to parliament, which may take from August to September to finish.”

To prepare the national budget requires time, possibly extending to the second quarter of 2024, he added. This could potentially impact business and foreign investor confidence, implying the urgency for a new government to prompt economic growth.

President of the Thai Future Food Trade Association, Visit Limlurcha, underlined the importance of the private sector capitalising on opportunities to boost their business prowess, overcoming hurdles along the way, regardless of the political alliances forming the government. Visit said…

“The private sector wants the new government to continue existing politics, especially those relating to economic and export stimulus measures. This includes increasing trade facilitation, enhancing the country’s competitiveness by accelerating the reduction of production costs and promoting free trade.”

Amonthep Chawla, the chief economist of CIMB Thai Bank (CIMBT), predicted a political deadlock and economic upheaval if Pita fails to secure the necessary votes to become prime minister by August.

This could impact the Thai economy on various levels, potentially delaying the fiscal 2024 budget disbursement, affecting Q4 2023 government spending, and deterring foreign direct investment, with investors possibly reallocating investments to other ASEAN nations. This could also impact the purchasing power of households due to an uneven economic recovery combined with a predicted drought.

Travel tourism could also wind up in trouble. Sisdivachr Cheewarattanaporn, president of the Association of Thai Travel Agents, feared that if demonstrations ensued due to governmental formation delays, it could repel foreign tourists from visiting Thailand. Sisdivachr anticipates that any protests will still be peaceful as people are closely watching to see the next nominee for government formation, reported Bangkok Post.

Political instability could also deter high-end tourists from visiting Thailand, indirectly affecting the restaurant business, expressed Taniwan Koonmongkon, president of the Thai Restaurant Association. She said…

“However, political unrest poses a significant threat to market sentiment and could potentially undermine these positive developments.”