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Narongchai, also executive chairman of Export Import Bank of Thailand, said at an economic seminar on Friday hosted by Kasetsart University that the elected government should be comprised of coalition parties which will lead to the lack of decisive power. Morever, the government would focus on populist policies and is likely to avoid making decisions on key projects.

 "This will affect private investment environment," he noted.

 Narongchai noted that aside from political pressure, Thailand would also suffer from global imbalances as capital inflows would remain brisk due to the continued US trade deficits to China and Japan.

 Personally, he believed that the Thai economy would expand 4 per cent this year, the lowest growth rate in Asia. 

 He advised private companies to focus more on risk management. Under the new Constitution, there are limitations including the laws concerning foreign investment. He also noted that several new laws including the Financial Institutions Business Act and the Foreign Business Act also contains penalties and would put the business sector in the rigid framework.

 As market mechanism is distorted, new investment is likely to be delayed.

- The Nation