Having obtained a majority of votes from both houses of parliament, property magnate Srettha Thavisin emerged on Tuesday as Thailand's 30th prime minister, putting an end to a three-month political impasse.
In response, the business community is calling upon the new prime minister to expedite the government formation process to promptly address a series of challenges, including vulnerable exports, a pressing drought crisis and the ongoing economic recovery.
TIME TO WORK
Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI), said the FTI wants Mr Srettha's new cabinet to start working soon to restore and grow the Thai economy.
The outgoing Prayut Chan-o-cha cabinet has limited power to run the country since his announcement of the House dissolution in March, paving the way for the May 14 general election.
"We hope any political problems will end now," said Mr Kriengkrai, referring to the Move Forward Party's inability to secure a prime minister approval with a coalition government during parliamentary meetings in July.
"Thailand needs a new government to drive its economy."
ฺThe country needs a new government this month without further delay, which will be good for investment sentiment and the entire economy, he said.
Once the new cabinet assumes office, Mr Srettha's administration will face a number of tasks in dealing with economic issues, ranging from budget planning for the new fiscal year to high household debt and ailing small and medium-sized enterprises (SMEs).
Household debt amounts to 16 trillion baht or more than 90% of GDP.
The FTI said earlier many SMEs urgently need assistance from the new government as they struggle to deal with high operating and financial costs.
SMEs have been weakened since the pandemic and many of them have no liquidity because they cannot easily borrow money from banks, which are implementing stricter loan criteria, said Mr Kriengkrai.
The constrained access to funding is happening as SMEs face higher daily minimum wages, expensive electricity bills and costly raw materials, the federation said earlier.
The Bank of Thailand's decision to increase the policy rate to 2.25%, the highest level in nine years, also put pressure on businesses' financial costs.
Internationally, Mr Kriengkrai wants the new government to seek new trade opportunities among potential partners.
"Thailand should negotiate more free trade agreements and address non-tariff barriers," he said.
NEW GOVERNMENT IS URGENT
Panittha Buri, president of the Thai Exhibition Association, said she hopes a new government forms soon to build confidence among foreign investors and set a direction for national policies, especially for the Mice (meetings, incentives, conventions and exhibitions) segment.
Ms Panittha said the delay has affected budget usage by government authorities for events and meetings.
She said the government should move quickly in fixing prolonged problems in the service sector related to tourism and Mice, such as taxis that overcharge, which mars the country's image.
Chaichan Chareonsuk, chairman of the Thai National Shippers' Council, said once a new prime minister is elected, the private sector wants a new government formed promptly that can find common ground for collaboration among the coalition parties.
The private sector wants to avoid a recurrence of political turmoil, with the new government focusing on solutions to weakening exports, the drought crisis and uneven economic conditions, said Mr Chaichan.
"Warning signals have already been issued by the National Economic and Social Development Council concerning potential drought disasters, while the export performance is likely to be worse than anticipated," he said.
"The council is about to downgrade its export forecast in September. The Chinese economy is clearly in decline and the global market remains sluggish, lacking positive factors to stimulate growth."
The ambiance at the Thai parliament yesterday during the parliamentary vote for Thailand's prime minister. Chanat Katanyu
SME ASSISTANCE
Kanit Muangkrachang, managing director of Toshiba Thailand Co, the marketer of Toshiba home appliances, said the company is celebrating its 54th anniversary this month and is confident its next year will be stable, sustainable and secure strong growth.
"Our greatest concern is how fast a coalition government can be formed," Ms Kanit said.
Operators in Thailand's electrical appliance industry can develop their business plans if the new government continues its existing incentives or privileges for SMEs that supply raw materials to appliance manufacturers, she said.
"We need the new government to continue supporting SMEs as in the past, with tax privileges for companies wanting to automate their factories," said Ms Kanit.
"We buy raw materials from domestic suppliers. If SMEs cannot survive, we have to import raw materials instead. That introduces more business risk, particularly in terms of logistics difficulties."
MORE CHALLENGING
Marisa Sukosol Nunbhakdi, president of the Thai Hotels Association, said the sooner a government is set up the better, as the tourism high season is approaching and the industry only has three months to welcome a stronger flow of tourists.
She said once a tourism and sports minister is chosen, the Federation of Thai Tourism Associations will ask for a joint meeting with the new administration to assess the current tourism situation and propose solutions to obstacles.
Mrs Marisa said while the economy should experience a nice uptick from the prime minister vote on Tuesday, the new government still faces a tremendous task in stimulating the local economy and sustaining GDP growth at a satisfactory level.
"The tourism industry has brighter prospects in the final quarter because it is high season, but it might not be able to offset the decline in other key sectors as tourism before the pandemic only made up 18% of GDP," she said.
Mrs Marisa said if the administration is in office by September, a primary focus requested by tourism operators is government spending, particularly state meetings and incentives that were postponed as the nation awaited a new government.
As government spending normally accounts for about 20% of GDP, if this budget is unlocked it will instantly help stimulate the economy to some extent, she said.
The sooner a new government is established, the more clarity will be provided on drivers of economic growth in the administration, said Somchai Lertsutiwong, chief executive of Advanced Info Service.
Mr Somchai said the formation of a Pheu Thai Party-led government is a good sign to drive the economy in the big picture, such as promised projects and parties' policies.
"At least in the short term, for 1-2 years, the country's economy and people will benefit from both physical projects through the new government's operations and investment," he said.
Mr Somchai said the new government should tackle several chronic problems, including helping SMEs reduce operational costs and ensure their long-term growth.