Business sees political stability as key factor
Despite many other negative factors, Thai business people have said their biggest concern is the political stability of the country.
In a survey at the 24th annual meeting of the Thai Chamber of Commerce (TCC), the business leaders said they believed the country's economy would grow by an average of 4 to 4.5 per cent next year. But if the political situation was more stable, the growth would be 4.5 to 5 per cent.The survey found the business leaders had weighted the political factor as the key in influencing next year's economic growth. Yajai Chuwicha, head of the TCC's business office, said almost 95 per cent of respondents said the country's political situation could affect their businesses. More than 35 per cent said they would slow down their investment and expansion projects until a clearer political situation formed. Other factors expected to affect economic growth include skyrocketing oil prices, rising interest rates, and the baht appreciation. Respondents shared the view that the baht would strengthen to Bt35.50 to the dollar next year. But the acceptable rate for businesses was Bt37.50 per the dollar. They also expect the minimum lending rate (MLR) to be at 8 per cent a year, but think the appropriate rate is 7.5 per cent a year. The survey was conducted during the two-day annual seminar. About 243 business people answered the questionnaires. More than 28 per cent said they believe the economy will grow between 4.01 to 4.5 per cent next year, while a quarter expect economic growth of between 4.51 to 5 per cent next year. Thanawath Phonwichai, director of the Economic and Business Forecasting Centre, said respondents were concerned most about the political situation as it was the only factor that was beyond their expectations. "Business people would like the government to promote political stability and consolidation measures to secure the Kingdom's political certainty," he said. Other action wanted from the government is promoting morality in trade transactions, distributing income to low-income people and promoting closer ties with foreign countries. Dean of the Economics Faculty at the chamber's university, Saowanee Thairungroj, said about 33 per cent of the respondents believed the economy would return to normal in 2008, but most believed the economy should slightly improve in the second quarter of next year. Petchanet Pratruangkrai, The Nation
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