25-7-2023 (BANGKOK) The Federation of Thai Industries (FTI) has expressed concerns over the potential 10-month delay in establishing a new government led by the Move Forward Party. After Move Forward Party leader Pita Limjaroenrat failed to secure enough votes from the Senate to become prime minister, there were talks of forming a new alliance with parties under the Prayut Chan-o-cha coalition government. However, the 10-month waiting period, which includes the term end of senators next May, could have serious implications for the Thai economy and foreign investors.
FTI Chairman Kriengkrai Thiennukul stressed that such a long delay could severely affect the economy and investment confidence. Foreign investors, particularly those from the US and Europe, may not wait for 10 months to see the new government’s economic policies and could choose to invest in other countries instead.
While Asian investors seem to be less concerned about the ongoing political issues, stable politics remain crucial for the Thai economy to move forward. Thailand has been experiencing an export slowdown for the past eight months, and further economic challenges due to political issues are undesirable.
The FTI will thoroughly examine the impact of this waiting period if the Move Forward Party and its allies opt for this option. Members of the federation will discuss the urgency of the situation, as it goes beyond the expectations of the manufacturing sector.
In the meantime, the FTI reported a positive development in the Thailand Industry Sentiment Index (TISI) for June, reaching 94.1 from 92.5 points in May. The increase is attributed to continuous growth in domestic goods demand, driven by increased consumption and the recovery of the tourism sector. The construction industry also witnessed significant expansion due to real estate development and government projects.
Despite the positive trends, the high cost of living remains a concern that the new government should address as a priority. The FTI welcomes both the Pheu Thai and Move Forward parties to lead the new government and drive the economy under the budget allocation for fiscal 2024.
