A poll it conducted following the verdict found that almost half of 600 executives surveyed said the ruling would lead to an end to the political crisis and social confusion that has prevailed for several months.

The survey found that business leaders believed an improved political situation would accelerate economic activity. The university's Economic and Business Forecasting Centre subsequently raised its economic-growth forecast for the year to 4-4.5 per cent, from 3.8-4.3 per cent before. The earlier forecast was made when an exit from the political stalemate seemed more distant.

The results of another survey, conducted by the Federation of Thai Industries before Tuesday's ruling, were less sanguine.

It found that the executives believed the economy would deteriorate over the next three months, due to record-high oil prices, poor infrastructure, political turbulence and rising interest rates.

Federation president Santi Vilassakdanont said the Thai Industries Sentiment Index last month tumbled to 87.9 points, from 94.3 in May. The index began falling in April.

Santi blamed the fall on rising interest rates and oil prices, which have pushed up transportation costs. At the same time, most companies are unable to raise their prices, because of intense competition, both locally and internationally. He said the political situation had also affected investor confidence.

The index measures business sentiment in 35 industries, with 100 points indicating a neutral outlook for the economy. In May and June, the indexes for 26 industries were less than 100 points.

Decreases were expected in the indexes of 12 industries, such as mining, cement, rubber and furniture.

The indexes rose, however, in seven industries, including printing, pharmaceutical, petrochemical and car parts.

Meanwhile, the UTCC survey found that 46 per cent of executives polled said economic growth would be higher that what was forecast when the political situation was more uncertain. About 43 per cent said the Criminal Court's Tuesday ruling would not affect economic growth and 11 per cent said it would cut economic growth.

The chamber surveyed 600 executives from a cross-section of sectors.

Thanawat Polvichai, director of the Economic and Business Forecasting Centre, said the executives applauded the latest political development and predicted growth would accelerate in the fourth quarter. "Although rising oil prices are a key factor affecting their business, a clear-cut political situation will relieve business people's concerns," Thanawat said.

About 17 per cent of those surveyed said they had decided to implement their investment plans, compared with just 12 per cent in the previous poll.

Still, almost half of the executives polled, 46 per cent, said they would wait for the new government to be formed before implementing their investment plans.

The poll found that 55 per cent of those surveyed believe the Thai Rak Thai Party would lead the next government, while 31.3 per cent said it would be the Democrat Party.

Thanawat pointed out that following the judgement against the election commissioners, most executives believed no large political parties would be dissolved.

Saowanee Thairungroj, UTCC dean of economics, said negative factors that continued to restrain the economy included inflation, lingering political uncertainty, rising interest rates and fluctuating exchange rates.

She said executives wanted the government to make solving these problems a priority.

An earlier poll conducted by the university found that most executives said business activity had either remained unchanged or decreased in the second quarter.

The results were based answers by 600 executives surveyed from July 10-14.

Yajai Chuwicha, chief pollster at the university, said trading companies and small businesses were most affected by the slowing economy in the second quarter. Yajai said 53.5 per cent of trading enterprises said business was deteriorating.

The industrial sector suffered the least, because industrial trading firms have higher exports. The export sector performed well in the first half.

Exports grew 16.6 per cent to US$60.55 billion (Bt2.29 trillion) in the first half. The university is maintaining its full-year forecast of 13-15-per-cent export growth.

Chalida Ekvitthayavechnukul,

Petchanet Pratruangkrai

The Nation