Thai politics is approaching a turning point, with the political fate of Prime Minister Sritha Thavesin and leader of the opposition Move Forward Party (MFP) set to be decided next month by the Constitutional Court.
There is uncertainty over the rulings scheduled for July 3 in the dissolution case against MFP and on July 10 in the Sritha case, with the business sector concerned about the impact on the Thai economy if the current administration is disrupted.
Mr Sritha is struggling to defend himself in an ethics investigation brought against him in the Constitutional Court, following his controversial appointment of Pichet Chuenpan as Minister of the Prime Minister’s Office in the recent cabinet reshuffle.
Pichet, who was sentenced to six months in prison in 2008 along with two colleagues after they tried to bribe Supreme Court officials by handing them a paper bag containing 2 million baht, resigned shortly before the Constitutional Court agreed to go ahead with the petition for the investigation. .
Very uncertain
At Pisanwanich, an independent international economics analyst, said the political situation in Thailand is highly uncertain.
He said that if there was a political change, any new coalition government would likely not include the Pheu Thai Party, which currently holds the largest number of seats in Parliament.
If Mr. Sreetha is determined to violate ethics regulations by appointing Pichet, which would increase pressure on him to step down, Mr. Att sees three possible candidates for the next prime minister’s job.
These candidates include Paitongtarn Shinawatra, leader of the Pheu Thai Party and daughter of former Prime Minister Thaksin Shinawatra; Chikaisim Nitsiri, a key figure in the Pheu Thai Party; and Boomjaithai Party leader and Deputy Prime Minister Anutin Charnvirakul.
If Ms. Baitongtarn is chosen, there may be questions about her knowledge and abilities, affecting already weak confidence in the government, Att said.
Last week, the House of Representatives held a three-day discussion on the budget proposal. Mr Att says public confidence in the current administration is waning. Chanat Cattaneo
Trust problem
He said the decline in confidence in the government stems from a decline in public confidence after the Pheu Thai Party’s alliance with the previous coalition government, which led to the marginalization of the MFP in forming the government, despite the MFP winning the largest number of votes in the elections.
Another factor affecting confidence is the lack of clear results during the government’s ten-month term. Many projects, such as land bridges, soft power initiatives, and digital wallet publications, have yet to yield tangible results.
At the same time, rising production costs have increased the cost of living, making Thailand one of the most expensive countries in Southeast Asia, surpassing Vietnam, Indonesia and Malaysia, Mr Att said.
He said the interest rate cut, which the Sritha government had long supported, was worth pursuing as it would ease the burden on debtors and stimulate domestic investment.
Mr At said the Bank of Thailand is reluctant to cut interest rates because domestic consumption is still growing.
However, he said the general feeling among the public and market vendors is that spending is no longer as fluid as it was in the past.
In addition, Mr. Att said, the rise in consumption came from a low base during the pandemic, making this growth appear illusory.
“Thailand’s inflation rates are relatively low, and not in line with rising oil prices. Oil prices are a crucial production cost, leading to higher overall production costs, although inflation is not correspondingly rising,” he said.
Limlorcha, vice president of the Thai Chamber of Commerce, said the private sector wants more stability from the government.
Mr Sritha and Ms Paytongtarn, centre, stand with young party members after the “10 Months Without Waiting, Going Forward to Achieve 10 Out of 10” event at the party headquarters in Bangkok’s Huai Khwang district last month. Pattarapong Chatpatarasil
He said a stable government is crucial to maintaining investor confidence as Thailand competes for foreign direct investment.
Mr. Visit said Thailand must adjust its production structure, improve its competitiveness and drive economic growth, which is still recovering amid the global economic slowdown.
As a result, the private sector and government must cooperate to promote economic recovery. He said that in the short term, companies want to accelerate the disbursement of the state budget.
Chaichan Charonsuk, president of the Thai National Shippers’ Council, echoed calls for government stability as exporters grapple with global uncertainties such as ongoing geopolitical tensions in the Middle East, which are increasing shipping costs and could escalate into a trade war in the second half. Of the year.
If the political situation in Thailand is stable, it will accelerate the strategic planning and budget for 2025, Zhaishan said.
A salesman staggers
The uncertain future of Mr Sritha, often dubbed a salesman tasked with attracting foreign investors to Thailand, has manufacturing operators worried, fearing his impact on investment prospects and the government’s key economic policies.
The Prime Minister, who insisted on playing the role of a salesman to increase foreign investment, has spoken to several companies about expanding into Thailand, especially during his foreign trips.
“His change as prime minister will worry foreign investors, which will lead to a halt or delay in their decisions to invest in Thailand,” said Kriengkrai Thinokul, president of the Confederation of Thai Industries.
If the court hearing leads to Sreetha’s removal from office, political insecurity will erupt, prompting investors to wait for clarity on the new prime minister and whether the same policies will be continued, Kringkrai said.
Above, tourists take photos with Wat Arun as the backdrop. Mr Sisdevacher says the tourism sector could be affected by unstable politics in the wake of the two Constitutional Court rulings. Abichart Ginacol
He said policies such as the distribution of 10,000 baht digital money, a key pledge made by the Pheu Thai Party ahead of the 2023 elections, are at risk if political unrest emerges.
Similar political uncertainty erupted last year when Pita Limjaroenrat, former leader of the Pluralist Movement Party, failed to gain enough support in parliament on July 13 to become the country’s prime minister, despite the party winning the largest number of votes in the general election. Which was conducted on May 14.
Kringkrai said the unclear timetable for forming a new government weakened business confidence at the time.
Damage control
Politics was among the factors that caused the Thai Industry Confidence Index (TISI) to fall to 92.3 points in July last year, down from 94.1 points in June, hitting a 10-month low.
Domestic politics was among the growing concerns of 1,329 Fast Track Initiative entrepreneurs in 46 industries surveyed for TISI in May this year.
The index continued to decline this month to 88.5 from 90.3 points, with 15,000 workers losing their jobs this year.
He said the political problems are expected to worsen the Thai economy, which is already suffering from weak consumer spending amid high levels of household debt, which is prompting banks to tighten lending standards, affecting many companies such as the auto industry.
Narongsak Jeevakannon, CEO of PTT Global Chemical, said he believes the government will not allow the manufacturing sector to falter due to problems caused by politics.
He said that Thailand is a center for cars with internal combustion engines and some electronic products.
“We believe that the government will succeed in maintaining this situation regardless of the political problems,” Narongsak said.
Saving tourism
Unstable politics related to the two court cases will undoubtedly impact the economy, and the tourism sector in particular, said Sisdevasher Chiwaratanaporn, president of the Thai Travel Agents Association.
Sisdevacher said partner operators abroad, such as China, have already expressed concerns about the situation.
Since the tourism sector is very sensitive to external factors, he said political uncertainty would destabilize the morale of incoming tourists who may feel anxious about unpredictable situations.
“It is necessary to prioritize economic and tourism confidence,” said Mr. Sisdevacher.
Export containers are sorted at Klong Toei Port in Bangkok. Thai shippers want more government stability as exporters deal with geopolitical tensions in the Middle East, says Chaichan. Pharoth Hironiathep
He said the government should be proactive in its communications, promoting safe tourism as well as potential destinations in Thailand.
“If political tension escalates, it is the duty of all sectors to save the tourism industry by ensuring that tourists remain intact,” Sisdevacher said.
He said that if there are no changes at administrative levels, the government should use this opportunity to accelerate the market.
Mr. Sisdevacher said that visa exemption programmes, airport development and promotion of second-tier cities are good initiatives, but there are more things the authorities need to do. For example, nominating five or 10 second-tier cities as pilot cities to develop into major tourist cities, and providing them with adequate infrastructure, not just marketing promotion.
The government should also listen more to the private sector because companies can provide it with the information needed to plan policies effectively, Mr. Sisdevacher said.
Fusadi Arunmas and Molpasorn Chuong