The discussion will be chaired by caretaker Deputy Prime Minister and Commerce Minister Somkid Jatusripitak, who hopes the in-depth dialogue will increase the country's competitiveness, initially among small and medium-sized enterprises.

"We will discuss the effect of high oil prices, interest rates and the slowing economic growth," Commerce Vice Minister Suvit Mesincee said after a meeting with the Federation of Thai Industries (FTI), Board of Trade, Thai Bankers Association and the Federation of Thai Capital Market Organisations yesterday.

FTI chairman Santi Vilassakdanont said PPPD would be at the heart of any public/private cooperation in the future.

"It is a new dimension in which we will see private associations starting to work with with public agencies from the beginning, unlike in the past when private associations had to come up with proposals which could not be carried out by the government," Santi said.

At the meeting yesterday, participants from the private sector said they could handle the problems facing them, but that the most important issue right now was resolving the political vacuum as soon as possible to assure investors of the country's political stability.

"During April and May after the election, Thailand drew back investment. But when the election results were nullified and it became unclear when the new election would be held, investment obviously stalled and could have flowed out of the country," said Adisak Rohitasoon, adviser to the FTI's auto club.

Adisak added that right now all industries had witnessed a slowdown in demand, even in the auto sector, which could be heading towards stagnant growth in domestic car sales.

Nipon Surapongrukcharoen, vice chairman of the FTI, also urged the caretaker government to take action to solve the country's economic problems.

"From a legal aspect, the caretaker government is capable of taking any action to pave the way for smooth economic growth, as long as the action does not involve conflicts or ethical problems," he said.

One problem expected to arise from the political vacuum is the delayed approval of the budget for the 2007 fiscal year, which begins on October 1.

Yesterday, caretaker Finance Minister Thanong Bidaya instructed all units of the ministry to come up with a three-year revenue/spending plan, to ensure the ministry has a mechanism to cope with any possible negative outcomes as a result of the delayed disbursement of the 2007 budget.

"There is a belief that the 2007 budget will be delayed, but if we have a clear three-year investment plan, we should be able to bring back investor confidence," Thanong said after the meeting with top officials at the ministry yesterday.

He also ordered the Fiscal Policy Office to assess the government's revenue in the next three years to show how the political uncertainty, high oil prices and high interest rates could affect the country's finances.

"While the impact of political uncertainties on the country's finances is unclear, this plan should help investors evaluate the situation more correctly. The office must build in all factors so that investors know whether future budgets will be balanced or in deficit."

He insisted the 2006 budget would be balanced.

In the current fiscal year, the Revenue Department has been assigned to raise Bt1.09 trillion, or 74.2 per cent of the overall Bt1.36-trillion budget.