UTCC warns of negative impact on Thai economy from PM nomination delays

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UTCC President Thanavath Phonvichai stated that recent business surveys conducted by the university revealed concerns about the lengthy process of government formation, which could impede the implementation of new economic policies aimed at fostering economic recovery.

The University of the Thai Chamber of Commerce (UTCC) has warned that any delays in the nomination of a prime minister and the formation of a new government could have a negative impact on the Thai economy.

UTCC President Thanavath Phonvichai stated that recent business surveys conducted by the university revealed concerns about the lengthy process of government formation, which could impede the implementation of new economic policies aimed at fostering economic recovery.



The UTCC forecasts that if the election and formation of the government happen in August or September, the economic impact will be minor because it will fall within the existing budget framework, allowing investment plans to proceed as planned. However, if the formation of the government continues until October, the budgeting process may be pushed back to the second quarter of the next year, which will impede economic growth.



The UTCC also noted that if the prime ministerial nomination and government formation go smoothly and without major protests, allowing for the implementation of investment proposals, the economy might increase by 4%. However, if the selection process and government formation are met with strong protests that cause other nations to issue travel warnings, it might result in a decline of 10 million international visitors in the second half of the year. This would result in a loss of 500 billion baht in tourism earnings and a 1% drop in GDP, both of which would be detrimental to the Thai economy.



The Federation of Thai Industries (FTI) also expressed concerns about the situation, stating that foreign investors may delay their investments due to political turbulence. It emphasized the importance of revitalizing the economy following the pandemic and expressed hope that any political differences may be resolved inside parliament with all parties working in the best interests of the country. (NNT)