Bangkok: The private sector in Thailand is urging an accelerated formation of a government to bolster the economy and enhance investment confidence.
According to Thai News Agency, Mr. Kriangkrai Thienukul, President of the Federation of Thai Industries, emphasized the necessity for the new government to implement measures to elevate the country's GDP growth to 2 percent by 2025. He highlighted the need for substantial funds to rejuvenate the economy, stressing that a stable and confident government formation is crucial. The current economic landscape demands immediate financial stimuli to invigorate the economy, generate employment, and circulate money in rural regions, which would be bolstered by a stable political environment.
Thailand is also contending with new initiatives from the ASEAN group, notably the merger of Singapore and Malaysia, forming the Johor-Balu Special Economic Zone (JS-SEZ). Situated in Johor, Malaysia, opposite Singapore, this zone is a joint effort to attract investments and elevate Johor as a hub for manufacturing, logistics, and tourism. The Thai government is thus urged to revitalize investment swiftly to remain competitive within ASEAN.
Dr. Yanyong Thaicharoen, Senior Executive Vice President and Chief Executive Officer of the Economic Intelligence Center at Siam Commercial Bank, stated that political parties must collaborate to reduce uncertainty and hasten the government's formation. This will allow the announcement of medium-term and long-term fiscal policies essential for economic progression. He noted that dissolving parliament is a secondary concern, and prolonged government formation could heighten concerns among the private sector and capital market investors.
A swift establishment of a new government would alleviate these concerns significantly. The new administration must expedite the spending of the 2016 budget to avoid delays in the government's investment budget, especially as exports are expected to decline in the year's second half due to the hurried exports by the private sector ahead of the impending 19% US tariff.