Influential business body lauds coalition govt for finalising new Cabinet quickly

The remarks came during the committee’s monthly meeting on Wednesday. The group also called for the government to expedite the implementation of the digital wallet scheme.

Payong Srivanich, chairman of the Thai Bankers Association and a JSCCIB member, expressed the group's satisfaction with the government's rapid progress in addressing economic challenges, noting that the JSCCIB recently met with Prime Minister Paetongtarn Shinawatra to present potential solutions to the economic slowdown.

"We are encouraged by the successful formation of the Cabinet. Urgent action is needed to distribute the digital wallet cash and restore confidence. We hope the economic team led by the deputy prime minister has the necessary authority to implement new government policies. We are also concerned about the impact of the recent floods, which have caused damage exceeding eight billion baht. We plan to submit a white paper to the prime minister this month," he stated. 

The economic slowdown has resulted in the closure of over 757 factories in the first seven months, coupled with high household debt and a substantial informal economy. To address these issues, the JSCCIB  has accelerated the preparation of a 'white paper' by September 2024, outlining recommendations to the government for economic revitalisation.

"The swift formation of the Cabinet suggests a united government, despite its multi-party composition. We urge prompt implementation of the necessary measures. While we may initially need to await the white paper, which will incorporate the views of the three private sectors, we believe it can be quickly summarised by the Ministry of Agriculture and presented to the government," Payong noted.

Regarding the prime minister's involvement in the economic team, he said that there would be clarity when the official policy statement is made in Parliament. However, he noted that the government's openness to engage with the private sector had already yielded positive outcomes, particularly in terms of financial and capital market recovery.

"To revitalise the economy, we need to inject money into the system as soon as possible, especially for vulnerable groups," he emphasised.

Sanan Angubonkul, chairman of the Thai Chamber of Commerce, stressed the importance of rebuilding public confidence as a priority following the formation of the government.

He also highlighted the need for digital money policies, including the immediate distribution of the 10,000 baht digital wallet to alleviate living costs and address water management issues. 

Additionally, he urged the government to expedite the disbursement of the 2024 budget and ensure its timely continuation in 2025.

"The market currently lacks money in circulation. Injecting funds into the system would significantly boost public confidence. Regarding the distribution of the 10,000 baht digital wallet, we propose prioritising vulnerable groups, including those with disabilities. Any surplus funds could be allocated to other groups, subject to government decision," he explained.

Addressing concerns about potential risks to investor confidence arising from accusations against the government, Sanan stated that the private sector views the government as unified and supported by a sufficient number of votes in the House of Representatives.

He emphasised the importance of the economic team's leadership and advocated for the deputy prime minister to take on this role, citing past experience in successfully addressing economic challenges.

Thawee Piyapatana, vice chairman of the Federation of Thai Industries (FTI), compared the current Cabinet favourably with its predecessor, highlighting its clearer policies. He also expressed gratitude to the government for its response to issues raised by the FTI, such as electricity bills and the repayment of subsidies to the industrial sector.

The meeting also addressed concerns about the water situation and floods in northern and upper central Thailand. JSCCIB members estimated damage at between 6 billion to 8 billion baht, equivalent to 0.03% to 0.04% of GDP. The agricultural sector is expected to be most severely affected. The government plans to closely monitor potential storms during September-October, which could exacerbate flooding and further impact the economy.

In addition to domestic demand, Thailand's economy is facing challenges from weak global demand, despite a recent increase in exports. The group pointed out that while the government is accelerating investment budget disbursement, the overall economic growth rate for the second quarter of 2024 remains sluggish. Private investment contracted by 6.8%, primarily due to a decline in domestic car sales, reflecting a decrease in consumer and business confidence.

Meanwhile, the JSCCIB maintains its forecast for Thailand's economic growth rate at 2.2-2.7%.

To address water management challenges, the meeting resolved to establish a sub-working group to prepare proposals for the government. The focus will be on long-term planning to increase water management efficiency, reduce flood risks, and enhance water storage capacity.