According to Assoc. Prof. Dr. Thanavath Phonvichai, president of the University of the Thai Chamber of Commerce (UTCC), Thailand could suffer a “lost year” if the process of selecting a new administration is delayed until May of next year.
The term “lost year” refers to a long period of slow economic development and falling investment.
According to Dr. Thanawat, the time spent on forming a new administration is damaging the economy, particularly for the coming year. If a new government is elected in August, the country should have a new cabinet and a policy statement in place by September.
He added that budgeting under Pheu Thai’s leadership can be completed sooner than under Move Forward, which has a zero-based budgeting philosophy that requires all expenses to be justified and approved in each new budget period.
Waiting another 10 months to create a new government will have a negative impact on the economy. People’s faith in the state of the economy will deteriorate. When investors have no notion what the country’s policies will be for so long, everything comes to a halt, and the economy gradually slows.
Drought is another issue that the country is dealing with as a result of the El Nio weather phenomena. The agricultural industry will suffer if the country does not prepare adequately and is not proactive. Farmers will become more in debt, and the export sector will not revive owing to a lack of government assistance.
Dr. Thanawat also stated that the UTCC anticipates Thailand’s economy to grow by 3.1-3.5% this year. Tourism is the key driver, with the country expecting at least 25 million visitors by the end of the year. However, if there are additional protests and rallies, that number may decrease.
