Although the private sector is increasingly concerned that the murky election result could stall economic momentum, the Bank of Thailand remains optimistic that domestic investment and consumption -- two drivers of economic growth -- are resilient.
The current government still has full authority, so politics should not dent growth, said Don Nakornthab, senior director of the economic and policy department at the central bank.
State investment in megaprojects such as the Eastern Economic Corridor will remain uninterrupted given the functional government, he said.
Domestic investment and consumption remained solid in the first two months this year and their outlooks are bright, Mr Don said.
In February, private consumption indicators across categories continued to expand from a year earlier, he said. Purchasing power remains in good shape, thanks to improving farm and non-farm income, in line with the higher consumer confidence index.
Private investment fell slightly in February from a year before, mainly due to the continued decrease in permitted construction area, but investment in machinery and equipment continued to expand.
Capacity utilisation was 68.1% in February, a tad lower than 69% in the previous month.
But political uncertainties during the government's transition period could hit 10% of state-owned enterprises' investment value. The central bank expects the new government to be completely formed by July, Mr Don said.
On the external front, he said exports are expected to contract in the first quarter because of the high-base effect of last year and the US-China trade dispute.
Payment-based outbound shipments surged 11.1% for the January-to-March quarter of 2018, while exports fell 1.7% in February and 4.8% in January this year.
"With external uncertainties, the export contraction could continue into the first half but requires close monitoring of the trade spat," Mr Don said.
He said exports are likely to pick up in the second half, based on the assumption of an easing of the trade spat as the ongoing trade talks by the world's top two economies near a conclusion on some issues and several countries' stimulus measures deliver a fillip to global trade.
In March, the central bank slashed its payment-based export growth forecast for 2019 to 3% from the 7% previously predicted and lowered its GDP growth view to 3.8% from 4.1%.
