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Investor flight warning

FTI slams 10-month wait for government

Protesters gather during a demonstration in support of the Move Forward Party in Bangkok on July 23, 2023. (Photo: AFP)
Protesters gather during a demonstration in support of the Move Forward Party in Bangkok on July 23, 2023. (Photo: AFP)

The Thai economy and foreign investors cannot wait 10 months to see a new Move Forward Party-led government established without objection from senators whose term will end next May, says the Federation of Thai Industries (FTI).

The 10-month idea was floated after Move Forward Party leader Pita Limjaroenrat failed to secure enough votes from the Senate to become prime minister, so its ally Pheu Thai Party may form a new alliance with parties under the Prayut Chan-o-cha coalition government despite fears that this will spark street protests.

"The FTI expects the economy and investment confidence to be severely affected if the country faces such a long delay," said Kriengkrai Thiennukul, chairman of the FTI.

Foreign investors, especially those from the US and Europe, cannot wait 10 months to see the new government's economic policies and will decide to invest in other countries instead, he said.

Asian investors, including Chinese, Japanese and South Korean business people, appear to be less concerned over the ongoing political troubles, but the Thai economy needs to move on, and stable politics are among the factors that would support the economy.

"Thailand has already had an export slowdown for eight months, and overseas trade is likely to decrease through the rest of the year," said Mr Kriengkrai, stressing that the country should not face more economic problems caused by political issues.

The FTI will thoroughly examine the impact of the 10-month waiting period if the Move Forward Party and its seven political allies resort to this option.

Members of the federation will discuss this urgent issue because it is "beyond the expectation" of the manufacturing sector, said Montri Mahaplerkpong, vice-chairman of the FTI.

"We'd rather want the new government to be established and drive the economy under its budget allocation for fiscal 2024," said Mr Montri.

"We welcome both Pheu Thai or Move Forward parties to lead the new government."

The FTI on Monday reported a rise in the Thailand Industry Sentiment Index (TISI) in June to 94.1, from 92.5 points in May, the first increase in three months.

The higher TISI was attributed to many positive factors, including continual growth of domestic goods demand, driven by more consumption and the tourism recovery.

According to the FTI, the construction sector expanded significantly, thanks to real estate development and government projects.

The depreciation of the baht in June, alongside low freight rates, also stimulated exports.

Mr Montri said the high cost of living is still a problem in the country and must be among the first priorities for the new government.

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