The private sector in Thailand is concerned about the delay in the formation of a new government, as it could affect new investments and the tourism sector.
The private sector is worried that the delay will dampen investor confidence and delay decisions on future investments.
- The delay in government formation may affect investor confidence and new investments in Thailand.
- Violent protests could have a negative impact on the tourism sector and deter potential visitors.
- The private sector is reliant on foreign workers to drive the economy and is seeking an extension of the deadline for registering undocumented workers.
They emphasize the importance of a peaceful political environment and urge the caretaker government to continue its work. Business leaders also stress the need for a new government to prioritize improving the capabilities of SMEs and focus on long-term growth.
Streets protests concerns
There are concerns that street protests could negatively impact Thailand’s image and deter potential visitors. The event management sector is particularly concerned about the impact of violent protests on safety and business confidence.
Additionally, the private sector is preparing to propose an extension to the deadline for registering undocumented workers. They highlight the importance of foreign workers in driving the economy, particularly in sectors such as tourism, construction, and food processing.
The Kasikorn Research Center (K-Research) predicts that the domestic political situation in Thailand will have a significant impact on the economy in the second half of this year.
If a new government is not formed by August, it could lead to a decline in GDP growth. Additionally, the sluggish economic recovery in China will also affect the Thai economy, particularly the export and tourism sectors.
K-Research expects Thailand’s export growth to China to be 3.4% this year, while overall Thai exports are predicted to contract by 1.2%. However, the research center maintains its 2023 GDP growth projection at 3.7% and expects the growth rate to improve in the second half of the year due to a rebound in the tourism sector and export growth.
Household debt is another challenge that the new government needs to address, and it would take around five years to reduce the country’s household debt to 80% of GDP. The central bank’s measures to contain household debt may reduce banking industry earnings by around 2%.