Consumer spending remains far from improved in the first half of the year as the gloomy export outlook weighs on economic growth.
Overall spending power has reached the most critical level in the past five years, said Boonsithi Chokwatana, chairman of consumer goods conglomerate Saha Group.
"Consumer spending in the past few months has been a source of concern because the export value of farm products fell sharply due to the strong baht," Mr Boonsithi said on Thursday. "The situation may get worse in the second half unless the government moves quickly to rein in the baht to 34 to the US dollar from an of average of 31 now."
Apart from agriculture, the textile sector has also felt the pinch of a strong baht.
Saha Group, which engages in all aspects of textiles from downstream to upstream, is heavily affected by the baht's strength, Mr Boonsithi said, adding that the group has already scaled down its textile business.
The company has adjusted its fashion strategy by focusing on innovative garments to lure specific customer groups, expanding the business to organisation uniforms and increasing sales from e-commerce, he said.
According to Mr Boonsithi, the slow formation of the new government has also interrupted private investment, particularly from abroad.
"To curb further damage, the new government should rev up the formation of its cabinet as soon as possible or within one month before the situation gets worse," he said.
Moreover, the company will focus on expanding into promising market segments like education, logistics and services.
Mr Boonsithi said earlier this month that the group was delaying investment in consumer products and shifting focus to services, hotels and condominiums this year, citing political uncertainty as the key concern weighing on investment decisions.
He said the group had been set to splurge on a hefty investment budget this year and next, 2-3 times the outlay from 2018, had a government been formed a few weeks after the general election.
The group will start investing in the second half, but at a slower pace than last year and will instead place emphasis on the service sector.
Saha Group will invest in five areas in the second half of this year: industrial estates; hotels and condominiums; international schools; smart grid; and distributing Kumamon, the rotund, red-cheeked bear from Japan.
The group is teaming up with Sojitz Corporation, one of the 10 largest trading companies in Japan, to develop new industrial estates next to the group's own industrial estates in Kabin Buri, Prachin Buri; Lamphun; and Mae Sot, Tak province. Sojitz Corporation will also draw Japanese investors who have already invested in Vietnam and Indonesia to co-invest in the new industrial estate.
The group will also join with Tokyo Construction to co-develop a 200-unit condominium block and a 100-room four- or five-star hotel behind J Park community mall in Sri Racha, Chon Buri. The investments aim to cash in on the government's flagship Eastern Economic Corridor project.
The two investment projects are in the design process and are expected to start construction in the second half.
The company has also joined with a Thai partner to ask for the rights from King's College School Wimbledon, England to build King's College International School on a 24-rai plot along Rama III Road this year.
Each project requires an investment of at least 3 billion baht.
In a related development, ICC International Plc, Saha Group's marketing arm for fashion and beauty, on Thursday signed an agreement with ADK Emotions Inc to acquire the rights for Kumamon's master licensee in Thailand.
The company expects sales of Kumamon merchandise in Thailand to reach 40-60 million baht in 2020.
Vichai Kulsomphob, president of Saha Pathana Inter-Holding Public Co, the holding company under Saha Group, said it remains committed to continuing investment in the Thai market, with about 5 billion baht to be spent in various areas during 2019-20.
Saha Group expects total sales to grow by 3% from last year's 300 billion baht.