Six months after the coup, businessmen have given the Surayud Chulanont government the thumbs-down for its mismanagement of the economy.

Confidence is waning. Policies are introduced only to be withdrawn. The policy upsets of the past months such as capital controls and foreign business laws have sapped investor interest.

Although 2007 was supposed to be the year of rebounding confidence in the economy with political uncertainty expected to be dispelled, consumer confidence last month fell to its lowest point since August when the political crisis reached boiling point before the military stepped in.

Businessmen and analysts attributed the weakening of consumer confidence to the eroding faith in the military-installed government. Consumer expectations about the future were depressed - the sub-index hit 77.1 last month, its lowest reading since September 2001.

Chanin Donavanik, president of the Thai Hotels Association and CEO of Dusit Hotels and Resorts, said the private sector is disappointed with the government because of its inefficiency in solving problems and inconsistency in setting policies.

Businessmen had held high expectations of the new government, hoping it would restore people's confidence, particularly towards the economy and politics.

"But now, the government has been in office for six months, but nothing has improved for the better," he said.

Differences in approach between the new economic team and the Council for National Security have led to flip-flops in some policies. "The economic team is revising some good projects proposed earlier including the mega-project of five mass transit lines, or the 30-per-cent withholding rule. The private sector is confused. They prefer to wait and see instead of proceeding with their business," he said.

HSBC Global Research attributed the deterioration in consumer outlook to the sliding approval ratings of the government. After a high of 75 per cent in the immediate aftermath of the coup, only 48 per cent are now satisfied with the political leaders. In short, after an initial bounce last quarter, the consumer mood is again turning more bearish.

Prasarn Trairatvorakul, president of Kasikornbank, said the government should make it a top priority to build confidence among the general population as well as investors. When people feel more comfortable with the economic and political trend, spending would pick up and help propel the economy forward.

Looking ahead, economic sentiment can be further dampened by the rising baht and investment slowdown despite easing oil prices and inflationary pressure.

Bandid Nijathaworn, deputy governor of the Bank of Thailand, said four key sectors still show growth despite the economic slowdown apparent during the beginning of this year. They are agriculture, tourism, real estate and exports.

"We need to keep up the growth momentum of these four sectors to help revive consumption," he said.

HSBC said that in spite of near all-time lows in the unemployment rate, job growth is stagnating. "This potentially casts some doubt over a swift rebound in private consumption even if the political uncertainties dissipate."

Veerathai Santiprabhob, executive vice president of Siam Commercial Bank, said the government should pay more attention to economic stimulus as a complete package. Once the authorities get a clear direction and framework on economic catalysts, they would better cope with risk factors.

"When the economy is moving, it would lead to employment and income outlays. Then, confidence in investment, spending and consumption would return. And I believe the interim government will have more than six months until the general election. So there's enough time to come up with an economic stimulus package," he said.

Finance Minister Chalongphob Sussangkarn faces a challenging task ahead in taming the baht. The market expects that monetary policy would be used to halt the steady rise of the baht, which touched Bt34 a dollar last week.

Citigroup said a sharp rate-cut might not be the silver bullet to cure baht ills, and targeting inflation should remain the backbone of monetary policy. An acceleration of the policy rate-easing cycle might further encourage portfolio inflows, which would only strengthen the baht.

Santi Vilassakdanont, chairman of the Federation of Thai Industries, expects to see the central bank step in to stabilise the baht. "If the central bank makes the baht weaker than our export rivals, it would be great," he said.

He also believes in the need to cut interest rates to boost consumption and investment. However, the authorities shouldn't act too fast because it might shock investors. Neither should they abruptly reverse the 30-per-cent capital controls.

Santi said the government should also be more communicative with the public. To bring back local operators' confidence, it should visit their places more often to explain its policy and get their feedback. An FTI survey over the past two months showed confidence was quite low due to the murky political and economic climate.

Pornsilp Patcharintanakul, deputy secretary-general of the Board of Trade, said the government must do something about the baht's volatility as its main agenda. Businessmen are also depending on the government to initiate the mega-project bidding to confirm that the project will be continued in the next government.

The government has been encouraged to pass the amended Foreign Business Act and the Retail Business Act, as well as sign the Japan-Thailand Economic Partnership Agreement within its remaining period.

Pornsilp said the private sector wants the government to clarify regulations for all players, while the pact with Japan will help boost trade in the future. He also called for the sufficiency economy philosophy to be included in the constitution to promote sustainable economic growth.