Business leaders and stock market analysts welcomed the premier's statement vowing to dissolve parliament next month ahead of an election likely to take place on May 7.
The announcement provides more clarity on a potential general election date that was widely anticipated. Party campaigning should benefit the Thai economy, said the pundits.
"It is good to hear a clear declaration by the government on the general election," said Sanan Angubolkul, chairman of the Thai Chamber of Commerce.
This will enable both politicians and the business sector to prepare for election processes, while the government can speed up key economic issues that remain unsettled, said Mr Sanan.
"The election is expected to help circulate 80-90 billion baht into the economy," he said.
Mr Sanan called for the formation of a new government as soon as possible after the election to allow continued disbursement of the annual budget, with new measures rolled out to stimulate the economy.
This general election can allow Thailand to show the world its respect for its Constitution, said Somsak Leeswadtrakul, honorary chairman of G Steel Group. He urged Thais to carefully select capable MPs.
A new government can lead the country to overcome geopolitical uncertainties and explore new opportunities to make Thailand shine again, said Mr Somsak.
MARKET UPBEAT
Stock market analysts indicated Prime Minister Prayut Chan-o-cha's statement on dissolution was among the factors that helped the SET Index return to positive territory in early afternoon trade after closing lower in the morning session.
An analyst from Capital Nomura Securities who requested anonymity said Gen Prayut's statement had a positive psychological impact on the Thai bourse. However, the effect was limited as the market expected an election in early May.
"The upcoming election increases the confidence of both Thai and foreign investors," said the analyst.
Political campaigns are expected to boost economic activities and money circulation in the economy, said the brokerage.
Stocks expected to benefit from the election announcement include CPALL, MAKRO, AMATA, ADVANC, STEC, SC and SIRI, according to Capital Nomura.
The seven listed stocks finished higher on Tuesday, pushing the SET Index to rise 0.66%, finishing at 1,668.63 points in trade valued at 66 billion baht.
An analyst from Yuanta Securities agreed, indicating clarity on the election date improves market sentiment.
Domestic plays include the banking, commerce, retail, food & beverage, communication and media sectors, especially as the national poll draws near, the Yuanta analyst said.
POLICY VACUUM
For Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI), a delay in carrying out certain state policies and projects is expected after House dissolution, but this is usual in Thai politics.
When power changes hands, state officials tend to slow down their work and wait for a policy direction from a new government, he said.
"We are worried about a delay in some economic policies, but remain upbeat that many jobs will proceed through the transition period," said Mr Kriengkrai.
The primary wish of the business sector from the new government is unity, he said.
Thailand must steer away from political conflicts as they will affect foreign investors considering Thailand as a destination, said Mr Kriengkrai.
Issara Boonyoung, chairman of the committee for real estate development at the chamber, said the impact on economic sentiment will be minimal as the economy is already improving as foreign tourists continue to arrive in droves.
He said a new general election should help the economy nationwide, not only in tourist areas.
Some political parties will propose policies that refresh sentiment for the economy, including discontinuing some schemes the current government is operating, said Mr Issara.
Somchai Lertsutiwong, chief executive of Advanced Info Service, said prospective candidates who volunteered to become MPs must consider pushing benefits for low-income people as a priority because their well-being can strengthen the economy as well as the revenue stream of big corporations.
The nation's household debt should be managed through proper measures to ensure a better outcome, he said.
Stimulus policies focusing on real targets are needed to help create sustainable growth, said Mr Somchai.
Additional reporting by Kanana Katharangsiporn