Failure to install new govt by August could affect GDP, FTI warns

The FTI's Chairman Kriengkrai Thiennukul stressed the importance of avoiding any delays that could impact investor confidence, leading to a slowdown in investment until a new government is formed.

As the formation of a government is a crucial factor affecting the Thai economy, he warned that should the process not follow the August timeline, the GDP of Thailand may grow only by 2-2.5% instead of the anticipated 3-3.5%. The economy needs continuous momentum and faces numerous challenges in all dimensions, so it is essential to have an effective government to drive the economy forward.

Regarding the overall Thai economy for this year, it is expected that the Thai gross domestic product (GDP) growth rate will be around 3-3.5%, while exports will remain negative at around 1-0%. The second half of this year is a crucial period that needs to be monitored closely due to the vulnerability of the global economy, high inflation, and the signal that the United States will raise interest rates by another 0.5%, indicating that the direction of interest rates is still on the rise. The issue of inflation continues to impact purchasing power, Kriengkrai said.

The private sector is concerned that this situation should not lead to a global economic slowdown that would result in a decline in export orders. Currently, major markets such as the United States and Europe have significantly decreased due to economic contraction and reduced imports. Thailand's exports have been greatly affected for the past 7-8 months with unfavourable export figures. The Chinese economy is not as good as expected even though it has opened up. However, it is still hoped that in the last quarter of the year, which is the peak season, there will be an increase in orders, Kriengkrai added.