Despite uncertainties regarding the Pheu Thai Party's digital handout scheme, analysts are playing down the economic impact of the Constitutional Court's disqualification of Srettha Thavisin as prime minister, saying the political vacuum should be shorter than expected.
A special parliament session is scheduled for Friday to select a new premier, and any delay to the 2025 budget bill should be limited, said Rakpong Chaisuparakul, senior vice-president of KGI Securities (Thailand).
"Recent events, however, have raised uncertainty regarding the digital wallet stimulus," he said.
Chak Reungsinpinya, head of research at Maybank Securities (Thailand), foresees no delay in the 2025 budget disbursal, which already gained cabinet approval and is in the parliamentary approval process.
Delayed budget disbursements were a drag on the economy, but disbursement should accelerate in the second half of this year, said Mr Chak.
"We do not view this event [the dismissal of Mr Srettha and his cabinet] as having a significant impact on the economy or the stock market in the longer term as Mr Srettha was a political newcomer, not a major policy driver in the government," he said.
"In fact, we think this event marks the removal of the last major political overhang on the market."
Based on government data, Maybank estimates cumulative disbursement, including purchase orders, has reached 67% of this year's fiscal budget.
"We expect this figure to reach 83% by the end of the fiscal year on Sept 30, with the remaining amount spent in the following fiscal year," said Mr Chak.
Thanomsak Saharatchai, senior assistant managing director of research at Krungthai Xspring Securities, said following "a negative surprise", investors might opt to stay on the sidelines amid regulatory risks.
"The next Pheu Thai-led government might change the digital wallet stimulus to other projects that have a wider impact in driving the economy," he said.
Mr Chak said politics aside, Maybank has positive views of the Thai stock market's fundamentals, particularly as the earnings season so far "has been a relatively strong one".
Based on Bloomberg data, 204 companies have consensus quarterly estimates and 110 companies have already reported. Of these, 61% beat market expectations, while only 21% missed consensus estimates by more than 10%.
In aggregate, the results represent growth of 10.5% year-on-year and 3.1% quarter-on-quarter.
"We think this is encouraging and marks the beginning of an improved earnings outlook for at least the next three quarters," he said.
Digital handout up in air
Caretaker Deputy Finance Minister Julapun Amornvivat reiterated yesterday the digital wallet handout depends on the next government.
Regarding rumours that former premier Thaksin Shinawatra already ordered the cancellation of the handout, Mr Julapun said he did not know. The new government needs to announce its policies, he said.
"For now, these are just rumours. I will not say anything further about the digital wallet until a government is formed and the new prime minister presents the government's policies to parliament," said Mr Julapun.
A source from the Finance Ministry who requested anonymity said registration for the digital wallet project from Aug 1-15 totalled more than 30 million people.
Regarding concerns that registered data might be unsafe if the project is cancelled, the source said the data would remain secure.
Registration through the state's Tang Rat app does not use personal or financial information, said the source.
The app sends the registrant's name to verify accuracy with relevant agencies, including the Department of Provincial Administration, the Revenue Department and the Deposit Protection Agency. These agencies respond with a "pass" or "fail", without sending any personal information back to the app, the source said.
