6 June 2024

The selection of Thailand’s prime minister will be key to the performance of the Thai economy, whether it will continue to improve and prosper or go in the opposite direction, said Associate Professor Dr. Thanawat Pholvichai, rector of the University of the Thai Chamber of Commerce and advisory chair of the Economic and Business forecast centre, today (Thursday).

Parliament is currently in session to select Thailand’s next prime minister, with Move Forward party leader Pita Limjaroenrat as the sole candidate.

He said that businessmen, both Thai and foreign, and the public are closely monitoring the selection process, with serious concerns about if or when a prime minister will be selected.

If the selection process drags on and a government cannot be formed within August or September, he said the impact on the economy will not be serious and will be manageable. Investment projects can proceed, he said, adding however that, if by October, a government still cannot be formed, disbursement of the 2024 fiscal year’s budget will be postponed to the second quarter of the year and this will badly affect the national economy.

Thanawat said, if the selection of the new prime minister proceeds smoothly, even with minor protests, and a new government can be established within an acceptable timeframe, that will not impact on the disbursement of national budget. The Thai economy is forecast to grow by 4% next year.

In the worst case scenario, if Pita is disqualified by the Constitutional Court and the Move Forward party is dissolved by the Charter Court, resulting in violent protests, Thanawat said that Thailand can expect see a sharp drop in tourist numbers of about one million arrivals per month and a whopping loss of about 500 billion baht in tourism revenue, while the GDP may shrink by 1%.

According to the survey of the confidence of consumers in June, confidence increased to 56.7, compared to 55.7 in May, representing continuous rise for 13 consecutive months and the highest in 40 months.

Future consumer confidence index for June was at 63.9, a slight increase from 63.1 a month earlier, as consumers are still concerned about political uncertainty over the new government and the high cost of living.