Most business leaders in Thailand are concerned that the delay in the formation of a new government and post-election political conflicts will impact the Thai economy during the second half of the year and discourage investors, said Montri Mahaplerkpong, vice chairman of the Federation of Thai Industries (FTI), today (Thursday).

Worse still, if the conflicts turn violent, the tourism industry, which is the main engine driving the Thai economy, will suffer badly, he added.

The FTI gauged the opinions of 258 CEOs in July about their main worries for the industrial sector in the second half of the year. The poll shows that 81% of the respondents are concerned about the delay in forming a government and political conflicts. 76.4% are worried about high production costs from rising fuel, electricity and transport charges and raw material prices.

64.3% are worried about increased household debt and declining purchasing power, while 54.7% are concerned about high interest rates and a potential increase in non-performing loans.

The poll also shows 69.8% of the CEOs are worried that political protests may turn violent, while 66.7% are concerned that the prevailing political uncertainty will damage the confidence of foreign investors and may discourage them from investing in Thailand.

65.1% are concerned that the delay in government formation will impact efforts to solve economic problems and address the grievances of the people, while 56.6% say some development projects may be affected, due to delays in the disbursement of government funding.

Montri also said that the private sector expects the new government to open up to their participation in the reforms of several laws and regulations, which currently impede economic development, and speed up efforts to address household debt and debt incurred by the small and medium size industries.

The external factors which are of serious concern to the Thai private sector are rising interest rates and inflation, which will drive up the prices of energy and raw materials.