Compromise necessary for the country to move forward: business sector
The Thai business sector would like to see political parties reach a comprise so as to facilitate the formation of a new coalition government and thus allow the country to move forward without further delays.
According to Kriengkrai Theannukul, Chairman of the Federation of Thai Industries (FTI), the FTI, the Thai Chamber of Commerce (TCC) and the Thailand Development Research Institute (TDRI) agree that a new coalition government should be formed this month to minimise adverse impacts on the business sector, investment climate and the Thai economy.
They are urging all parties to take a step back to allow Thailand to move forward.
The Thai economy already faces pressures from global economic risks, climate change and drought risk and Thailand needs a government to address these issues which could affect agricultural exports and domestic consumption.
TCC chairman Sanan Angubolkul suggests that the formation of a new government should be completed within two months. This timeline is reasonable and allows for negotiations and mutual understanding among all parties, focusing on the country's interests. The urgent tasks of the new government include budget planning and various economic stimulus measures to boost domestic consumption and investor confidence.
If the Pheu Thai Party takes the lead and forms the government, it is expected that they will swiftly implement policies due to their previous experience in governance. This is crucial if the various challenges are to be addressed.
Moreover, any delay in forming the government beyond the established timeline could impact Thailand in at least five major areas:
1. Financial hardships, especially related to economic stimulus and relief measures. Delayed government action could lead to reduced purchasing power.
2. The agricultural sector's growth could be hampered by looming drought conditions in 2023, affecting farmers' production and income.
3. The allocation of the state budget is currently delayed, which affects public investment projects. Swift decision-making is needed to adapt to the economic situation.
4. High energy costs and other expenses continue to burden citizens.
5. Clarity on minimum wage policies is necessary for foreign investors, while prolonged uncertainty could deter new investments.
According to Narit Pisalyabutr, a senior academic at the TDRI, if a new government can be formed by September, the economic impacts would be limited. While some delayed investment projects may be affected, other budget allocations that have been approved can proceed.
It is estimated that spending in other areas could commence in the second quarter of next year. An acceleration of spending is required to minimise economic impacts, but the current timeframe is still manageable, Narit added.
