Thai private sector braced for impact amid political unrest and government delays

Protests and potential political instability are causing growing unease within Thailand‘s private sector, chiefly due to the impact of delays in forming the country’s new government. The possible effects are multifaceted, potentially touching areas such as new investments and the tourism industry.

The Thai Chamber of Commerce’s vice-chairman, Poj Aramwattananont, expressed concern yesterday in light of recent moves by the local Election Commission (EC). The EC recommended prime ministerial candidate Pita Limjaroenrat’s disqualification from his Parliamentary duties due to violations of electoral rules. Yet, constitutionally-compliant action is something the private sector can readily accept, according to Poj.

He noted forthcoming investments could be influenced negatively by the delayed government formation. An extended delay could significantly dent investor confidence, as policies set by a new government and its cabinet are often key determinants for future investment decisions.

Furthermore, the vice-chairman emphasised the obligation of the government to uphold peace and order, especially during political protests. Poj believes that the private sector and civil servants should carry on their duties without interruptions. He said…

“The caretaker government should continue its work.”

Experts believe political uncertainties may lead to a re-evaluation of economic prospects. Chief executive of Advanced Info Service Somchai Lertsutiwong did not provide a comment on the possible impact of a prolonged delay on the government’s formation. However, he highlighted the importance of SME empowerment, urging the new government to reduce operational costs for micro and small businesses, reported Bangkok Post.

Looking at the tourism sector, the president of the Khao San Business Association, Sanga Ruangwattanakul, expressed concerns revolving around the country’s protest movements. He warned that increasing demonstrations could tarnish Thailand’s reputation, disproportionately impacting potential first-time visitors who make up nearly 60% of tourist volumes.

In the same vein, Upathum Nisitsukcharoen, president of the Event Management Association, voiced concern that violent protests could disrupt events, stoking safety risks and discouraging participation. Upathum said…

“Violent protests would definitely have an effect on foreigners planning to travel to Thailand, especially first-time visitors. The event segment is greatly affected by political protests because the majority of rally venues are in areas where events are organised.”

Kriengkrai Thiennukul, chairman of the Federation of Thai Industries, expressed worries about budget planning for the new fiscal year, flagging a possible plummet in business confidence if the parliamentary vote for a new prime minister is extended.

Lastly, with a still-unset new government and looming deadlines for registering undocumented workers, Poj hinted that the private sector is prepping for an extension proposal. He emphasised the private sector’s reliance on foreign workers, particularly within tourism, service sectors, construction, real estate, and food processing.

“These sectors still face labour shortages and have a high demand for workers to support the country’s economic growth.”