Bangkok: The Federation of Thai Industries (FTI) has indicated that the Thai economy is poised to stagnate, regardless of whether Parliament is dissolved or a government is formed within the next four months.
According to Thai News Agency, the private sector is urgently calling for political clarity and a swift formation of a government. They emphasize the need for a Prime Minister who is knowledgeable, capable, and decisive. The FTI warns that either dissolving Parliament or delaying government formation would hinder the economy, potentially affecting budget disbursements for 2025-2026 and leading to a prolonged economic slump.
Mr. Poj Aramwattananon, Chairman of the Thai Chamber of Commerce and Board of Trade of Thailand, has addressed concerns regarding the political landscape. He discussed the People’s Party’s resolution to support Anutin Charnvirakul, leader of the Bhumjaithai Party, for the position of Prime Minister, as well as the Pheu Thai Party’s request to dissolve Parliament. Mr. Aramwattananon acknowledged that either option would stagnate the economy, even if a minority government were to form within the four-month timeframe. He highlighted concerns about inadequate budget disbursement for 2025 and anticipated further disruptions in 2026, which could impact investment spending. He also mentioned that ongoing US tariff negotiations are unlikely to have an impact, as they remain in the technical negotiation phase.
The Joint Standing Committee on Commerce, Industry, and Banking (JSCCIB) has consistently expressed the private sector’s desire for political clarity and a government that is legitimately elected and recognized both domestically and internationally. The current economic challenges facing Thailand include border and geopolitical issues. Despite constitutional limitations on the number of prime ministerial candidates, the private sector remains committed to having a capable and effective leader.
Mr. Kriangkrai Thienukul, President of the FTI, noted that the 2025 budget disbursement is nearing its conclusion, with only one month remaining. He contrasted this with past disbursements, which averaged over 60% by this time. The ongoing political situation is expected to further restrict budget disbursement. The private sector is concerned about the prolonged timeline for resolving political uncertainty, as the dissolution of Parliament and subsequent elections could extend the process to 9-10 months. Urging a swift resolution, they point to the current economic challenges, such as a 9.5% decline in trade with Cambodia from January to July, and a 97% decrease in exports in July alone.
Mr. Payong Srivanich, President of the Thai Bankers’ Association, expressed concerns about the growing number of vulnerable groups amid prolonged economic stagnation. He stressed the importance of addressing the stagnation to bolster confidence in the economic climate, investment, and spending.