26-7-2023 (BANGKOK) Foreign business communities in Thailand are expressing hopes for the establishment of a new government within a month, as any delay may result in missed opportunities for the country, according to Stanley Kang, former chairman of the Joint Foreign Chambers of Commerce in Thailand (JFCCT).
With no clear winner in the May 14 election, investors have been patiently awaiting the formation of the new government by assessing which parties would be able to achieve it.
“We understand the need for due processes. We hope all parties act in the best interest of the country, not just for themselves,” said Mr. Kang.
He further added, “I believe they will form the government soon, ideally within one month. Foreign businesses are eager to collaborate with any government that successfully forms to drive Thailand’s economic development.”
Mr. Kang also mentioned that controlled political protests are not a major concern for businesses in Thailand, considering the country’s previous experiences in handling such situations.
However, if the government formation is significantly delayed, until the end of the Senate term next May, Thailand could lose substantial opportunities.
“We cannot afford to wait that long. Delays in government formation will result in missed opportunities, and it will present significant challenges for Thailand due to various issues, although it is a worst-case scenario,” he warned.
Meanwhile, stock market analysts have observed volatility and thin trading on the Stock Exchange of Thailand (SET) index, primarily due to the rising uncertainty surrounding the government’s formation.
On Monday, the Office of Ombudsman requested the Constitutional Court to assess whether the parliament’s rejection of the Move Forward Party leader Pita Limjaroenrat’s renomination for prime minister was unconstitutional and called for postponing the voting until the court’s ruling was made. As a result, the second parliamentary vote for prime minister, initially scheduled for this week, has been postponed.
“Government formation is becoming increasingly uncertain, leading to a political and budgetary vacuum that may persist longer,” stated a research note by Asia Plus Securities (ASPS) on Tuesday.
The prolonged political uncertainty may also impact the 2024 budget, potentially leading to incomplete disbursement if the political vacuum lasts until May 2024, when the Senate’s term ends.
“Investors need to closely monitor the political situation as uncertainty tends to trigger fund outflows and adversely affect the SET index,” ASPS highlighted.
KGI Securities also noted significant foreign net selling of Thai stocks on Monday, indicating lingering concerns over Thai politics and a possible limitation on near-term market upside.
