The chairman of the FTI stated that the decision of the Constitutional Court to dismiss ‘Settha’ from the position of Prime Minister will cause the economy to stumble, creating a political hiatus, which will affect the confidence of foreign countries. Analysts see the Thai stock market as still sluggish, hoping that the new cabinet will adjust ineffective policies.
Mr. Kriangkrai Thienukul, President of the Federation of Thai Industries (FTI), said about the Constitutional Court’s decision to dismiss Mr. Settha Thavisin from his position as Prime Minister that the private sector wants everything to go smoothly and does not want politics to stumble, whether in the short or long term, because it will affect the confidence of investors both domestically and internationally. The question that will arise is who will be the next leader of the government? Will the various policies change? Therefore, investment must slow down to see the clarity of politics. Thailand will lose the opportunity to compete.
Currently,
there are already external factors affecting the Thai economy, causing people to lack purchasing power and have high household debt. If we have to start over, it will take time and it will be difficult to reach the goal. Changing the prime minister, although it is not a complete restart, causes the economic movement to come to a halt, like driving a car and the car breaks down and has to be pushed, but the private sector accepts the decision according to the Constitutional Court’s dimensions and continues to try to drive the economy to its fullest and best.
Mr. Kriangkrai said that even though there is no new cabinet yet, the budget that is about to enter the economic system in the second half of 2024 should continue, do not stop, and disbursement should be continuous, “don’t be in neutral”, otherwise the Thai economy will get even worse because there was an experience in the previous government where the budget disbursement was delayed causing the economy to stagnate, resulting in lost opportunities in all
aspects.
Mr. Paiboon Nalinthrangkura, Chief Executive Officer of TISCO Securities Co., Ltd., said that it has caused uncertainty in the stock market. In the past, most stock markets thought that Mr. Srettha Thavisin would stay on, but when the results came out like this, we have to admit that there is a risk in terms of a political vacuum. Even though there is a caretaker prime minister, it depends on whether the policies can be fully implemented or not. In addition, there is still a risk of the dissolution of the parliament, but we believe that it will not happen. We have to see who will be chosen as a prime minister candidate and from which party, whether the ministers will change or not, and most importantly, whether the policies that have been implemented will be continued or not. He thinks that there will be a political vacuum for a while. However, if the prime minister is proposed immediately, it may not take long to submit the name to the parliament. But that means that we have to talk to the coalitio
n parties first.
As for the impact on the Thai capital market, if we look at the positive side, the stock market did not fall sharply because everyone has accepted that the Thai capital market today is overvalued because we are the worst performing capital market in the world for the past 2 years. Today, there should not be much selling pressure because the stock prices of many companies are already lower than their fundamentals. However, the political atmosphere and sentiment factors are not conducive to people daring to invest. Therefore, today, I think that the Thai stock market is still in a sluggish atmosphere and there will not be much selling pressure because the political direction may change again or there may be disagreements or a change of sides, which is uncertain. However, I think that investors still think that the government will be in the same side, changing the prime minister and ministers, but not changing the policies, so that everything can continue. What we want to see is continuity beca
use in the second half of the year, the economy seems to be recovering. Our domestic purchasing power is still good, but there may be projects that are missing or interrupted, such as the 10,000-baht digital wallet project, which is still uncertain. In one way, it is a positive thing if the new government makes changes to allow money to enter the system 4-5 times, so that money can actually enter community shops, and expand to the big picture. According to the original concept, it may be a way to revive the Thai economy. But at present, there are still many questions. I think that if the new team adjusts the operating format to be easier but still achieves the overall results according to the concept, it will be a good thing. Including accelerating the disbursement of the 2024 budget, which is left in the system, more than 400 billion baht, in just 2 months, we must find a way to accelerate the disbursement.
As for the Thai ESG Fund, it is unlikely to be affected because it has already passed the Cabinet res
olution. As for the Vayuphak Fund, I am not sure because it has not yet reached the Cabinet. We will have to follow up to see if the next government will take action on this matter.
‘I expect that this Constitutional Court resolution will be an opportunity for the new cabinet to improve and change some policies that have been slow to implement or ineffective. At the same time, it is also an advantage because even though the economy seemed to be recovering in the past, it did not go as far as it should have. This time, it may be a change that leads to a better direction if there is some adjustment in the format,’ said Mr. Paiboon. -512, 517
Source: Thai News Agency