BANGKOK — The Thai stock market closed on Friday at 1,330 points, up 13.16 points or 1.2%, after the process of selecting a new Prime Minister in parliament proceeded smoothly. As the only nominee, Paetongtarn Shinawatra, leader of the Pheu Thai Party, received 319 votes in favor, with 145 against and 27 abstentions.
Among the votes in favor, there were 6 additional votes from members of the opposition Thai Sang Thai Party and 2 more votes from smaller parties.
According to Thai media, Prime Minister elect Paetongtarn will likely be formally appointed by HM the King in a ceremony in front of the King’s portrait at Pheu Thai headquarters, Voice Space, around 8.30 a.m. on Sunday, August 18, 2024.
The process of selecting a new Prime Minister to quickly lead to the formation of a cabinet comes after a situation that shook Thai politics. On Wednesday, August 14, Srettha Thavisin was removed from his position by a Constitutional Court decision.
This helped restore confidence in the business sector, which had been disheartened for two days. There is now increased belief that the new government, coming from the same coalition parties, will be able to continue working immediately.
Urges to Continue Srettha’s Key Policies
On August 16, Sanan Angubolkul, chairman of the Thai Chamber of Commerce and the Board of Trade of Thailand, noted that the government is likely to retain most of its coalition partners and the distribution of ministerial posts is expected to remain similar. As a result, economic policies are expected to continue without significant changes, boosting the confidence of the Thai and international community.
He stated that the private sector wants to see more teamwork with the coalition parties, which would lead to unity and stability in the new cabinet’s work. Many measures of the former Prime Minister Srettha, especially opening trade doors and attracting foreign investment, are things that the new government needs to continue. They should designate a ministry or responsible person to closely monitor the progress.
At the same time, advancing projects related to Soft Power is an area where the Chamber of Commerce sees Thailand as having an advantage and can already build on to create added value for the Thai economy. The private sector agrees that this issue should be continuously driven forward.
The Chamber of Commerce emphasizes the following: 1. cabinet formation should be completed expeditiously, with ministers who can work effectively and are accepted by the public, 2. policy measures, especially additional stimulus measures, should be implemented promptly, and the 2024 budget should be accelerated while strengthening Thailand’s competitiveness, including pursuing new market expansions (FTA) to promote Thai trade and exports.
The Thai Chamber of Commerce continues to forecast Thailand’s economic growth for this year within the range of 2.2-2.7 percent previously estimated by the Joint Standing Committee on Commerce, Industry, and Banking (JSCCIB).
More Measures to Boost the Economy
Mr. Kriengkrai Thiennukul, President of the Federation of Thai Industries, said that the private sector was not surprised that Ms. Paetongtarn has been elected as Thailand’s 31st Prime Minister. He believes that she will be able to work with all sectors and contribute to greater political stability.
“However, it is important that the new government is formed within a month to move the country’s policies forward, especially to restore investor confidence. Many foreign investors are seeking clarity on the situation in Thailand after Srettha Thavisin was removed. Most of them are still interested in investing, but they need continuity in politics,” he said.
Mr. Kriengkrai added that the private sector hopes that beyond the plan to distribute 10,000 baht of digital money, more measures will be taken to boost the economy. The urgency is on the government to decide the next steps as the 6-7 month delay in disbursing the budget means an economic stimulus is needed. Now that the budget is in place, it remains to be seen whether the government will proceed with the plan to distribute the digital wallets.
“Therefore, in addition to distributing the 10,000-baht digital wallet, the government should also implement other measures to stimulate the economy because the main challenges facing Thailand today are people’s livelihood and the competitiveness of SMEs. If possible, the private sector would like the government to reconsider raising the minimum wage to 400 baht per day to ensure that it is reasonable and does not put undue burden on the private sector,” he emphasized.
In addition, it is suggested that the government take measures to regulate foreign e-commerce platforms to prevent the influx of cheap and inferior products from abroad. The government should also set conditions for the purchase of domestically produced goods (Made in Thailand) under the digital wallet program to create opportunities and circulate money within the Thai economic sector.
Industrial Confidence Index Increased
Meanwhile, the Federation of Thai Industries (FTI) released the results of its Industrial Confidence Index survey for July 2024, which stood at 89.3, up from 87.2 in the previous month. This marks the first increase in four months, driven by rising domestic demand for consumer goods, particularly in the food, pharmaceutical, and cosmetic industries.
Additionally, the acceleration of budget disbursement and government spending has injected more funds into the economy, benefiting industrial goods, especially construction materials.
Applications for investment funding have also continued to increase. In the first six months of 2024 (January-June), the total value of investment amounted to 458.359 billion baht, an increase of 35 percent compared to the same period last year. In addition, the expansion of the tourism sector, supported by the government’s visa-free measures for foreign tourists and the promotion of domestic tourism during the low season, has also played a positive role.
In July, however, negative factors such as the high level of household debt and non-performing loans (NPLs) continued to put pressure on domestic consumption. This is reflected in the 24.16 percent year-on-year decline in domestic car sales in the first six months of the year and a 1.85 percent drop in car exports.
The real estate sector has also slowed down due to weak domestic purchasing power, and exports of durable goods such as air conditioners, refrigerators, gems and jewelry, and electronic products have also declined. In addition, transportation costs have risen, including higher freight rates and additional expenses.
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