Thai private sector urges quick election to address economic challenges

The Thai private sector has raised concerns that ongoing political uncertainty is worsening the country's economic challenges, with predictions that GDP growth in Q4 2025 could be severely impacted by slowing consumption and investment. Many stakeholders are calling for the dissolution of the House and fresh election to restore confidence and bring in a stable government to address economic issues.

Jitipol Puksamatanan, Assistant Managing Director at Finansia Syrus Securities, stated that while Thailand’s political vacuum continues, the economy could still grow by 2.0% this year, as forecast by the National Economic and Social Development Council (NESDC). A House dissolution and election would revitalise consumer spending and investment, and 90% of public sector investments are already tied to binding budgets, making a new election beneficial to the economy.

However, the potential for a four-month caretaker government presents risks of extended political paralysis, particularly if the new government must dissolve the House within four months. This could delay key processes such as budget implementation and investment projects.

The real estate sector is also feeling the impact, with Sunthorn Sathaporn, President of the Housing Business Association, urging for a quick election to restore public trust in the government. He emphasised the need to tackle critical issues such as tax reform, household debts, and Thai-Cambodian border tensions.

Pawoot Pongvitayapanu, CEO of efrastructure Group, a pioneer in e-commerce and startups, also expressed concerns about the political vacuum, stating that the Thai economy will not improve in the near future. He added that the private sector must brace for another few months before the new government can act.

Concerns over impact on economy and tourism for year-end

Kawee Srakawee, President of the Thai Alcohol Beverage Business Association, has expressed concerns about the potential economic impact of political instability and the possibility of a House dissolution. He acknowledged that political stability is critical, particularly in the next two months, as the tourism industry enters its high season. A political vacuum, coupled with the presence of a caretaker government, could lead to unclear communication with consumers and tourists, impacting economic stimulus plans, especially in the night-time economy and businesses related to tourism.

“If we don’t see clarity in the industry by December, and if communication with tourists remains unclear, it will make operations more difficult during this crucial tourism season,” Kawee said.

Thai GDP growth forecast to be just 1.8%

Associate Professor Dr Aat Pisanwanich, an expert in international economics and ASEAN studies, said that if a caretaker government governs for four months before the House dissolution, whether led by Pheu Thai or Bhumjaithai, Thailand's economy will be similarly affected. The remaining period before the dissolution would likely see politicians focused on preparing for the next election, rather than stimulating the economy.

“Under the scenario of a four-month caretaker government, it is expected that Thailand's GDP will grow by 1.2-1.8% this year, with Q4 GDP being the most impacted due to slowed consumption, exports, and investment,” Aat added.

Four months too short for economic recovery

Kriengkrai Thiennukul, President of the Federation of Thai Industries (FTI), stated that the selection of Thailand’s 32nd Prime Minister must follow the Constitution and existing legal frameworks. He noted that Thailand is entering a new phase of transition, presenting significant challenges, especially with issues the government must manage, such as trade negotiations with the US, resolving the Thai-Cambodian border conflict, flood management, addressing economic issues, supporting SMEs, and collaborating with the private sector to restructure Thailand's economy.

However, he expressed concern that if the new government must dissolve the House within four months, this time frame is too short to make significant progress, particularly in terms of economic recovery. The most that can be done in the interim is emergency measures, such as injecting funds or stimulating tourism. He argued that a government in power for an adequate period would allow for continued implementation of structural policies.

Thanakorn Kasetsuwan, president of the Thai National Shippers' Council (TNSC), emphasised that the new government must urgently address the economy, control production costs, and govern transparently to restore investor and public confidence. He added that the Cabinet should comprise experts with vision, prioritising the country’s interests rather than those of any political party or group, particularly in the allocation of the national budget, which must be targeted and transparent.

Furthermore, the TNSC proposed that the government control key costs, such as wages, energy, electricity, and exchange rates, to avoid Thailand being at a competitive disadvantage. The government must also support SMEs and send clear signals that it will not tolerate corruption in order to reduce hidden costs in the economy and boost confidence both domestically and internationally.

New government must restore economic confidence

Kobsak Pootrakool, Executive Vice President of Bangkok Bank, stated that the new government must urgently restore economic confidence amid the global economic slowdown, pressure from US policies, and competition with global powers. This will require a capable economic team, not newcomers.

Within the next four months, the government must implement clear measures, particularly by injecting 100 billion baht into the economy and proposing a reduction in the policy interest rate to support growth, which is expected to be below 1%, while also ensuring the stability of the Thai baht and preventing it from appreciating too much. Another key issue is supporting businesses, particularly SMEs, through procurement of domestic products (Made in Thailand) at 40% of the budget. The government should also inject an additional 400-800 billion baht through BAAC (Bank for Agriculture and Agricultural Cooperatives) to provide working capital.

Additionally, Kobsak suggested accelerating the use of funds to support the Ministry of Tourism and Sports and the Ministry of Commerce to stimulate tourism and expand export markets, aiming for visible results within four months. He also emphasised the role of the Eastern Economic Corridor (EEC), where Thailand is already well-prepared to attract foreign investment, alongside promoting a green economy and digital economy in the region.

Adisak Chairattananon, Secretary-General of the Association of Thai Travel Agents (ATTA), stated that if the House of Representatives is dissolved at this time and the caretaker government remains for another two months, it could impact the 2026 national budget and international negotiations, especially at major forums such as APEC 2025. He stressed the need for a government with full authority to implement policies and attract foreign investment during this fragile economic period.

However, if a new Prime Minister and government can be established quickly, they should focus on building confidence among the public and investors. The government should also expedite the management of the national budget, ensuring transparency, good governance, and the use of an experienced economic team. Plans for short-term, medium-term, and long-term economic development should be devised to address global challenges and be recognised on the international stage.

Kitti Pornsiwakit, President of the Association of Thai Tourism Marketing, stated that dissolving the House of Representatives could be a good solution to form a new government quickly, allowing for the development of long-term plans. He suggested that the new government should form a national government comprising skilled and capable individuals in key ministries, with the establishment of a dashboard system and a multi-generational advisory team.

“The appropriate duration for the government should be 6-12 months before dissolving the House, to ensure practical results. A four-month term might lead to issues where the government and civil servants are in neutral gear, wasting valuable time for the country,” Kitti explained.

Kitti also outlined seven urgent policies that should be immediately prioritised:

1. Resolve the Thai-Cambodian conflict quickly, through all available channels.
2. Address economic issues at all levels, from grassroots to large organisations, with targeted funds.
3. Review the 157-billion-baht budget to maximise its effectiveness.
4. Combat corruption rigorously, allowing public participation in oversight.
5. Attract tourists and distribute income to secondary cities while supporting local businesses.
6. Promote sustainable, digital, and health economies to compete on the global stage.
7. Develop a clear path for constitutional amendments, with genuine public participation.