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Published on December 13, 2007

"I don't think the election will have a strong effect on our economy, because it is automatically driven at present," he said at a dinner talk yesterday entitled "The Thai Economy after the Election".

The event was hosted by the Thai Federation of Industries' Printing and Paper Packaging Industry Club, in celebration of its 22nd anniversary.

However, Narongchai accepted that the economic climate was cloudy, because both investment and consumption had been slowly stimulated, partly caused by continuing political instability.

He suggested the new government speed up spending the reserve fund on its investment projects in the same way as China. Thailand's reserve fund, including the forward position, now is about US$100 billion (Bt3.36 trillion).

Another speaker, Toyota Motor (Thailand) vice chairman Ninnart Chaitheerapinyo, said he was optimistic about the economy next year.

He agreed the new government would need to focus on stimulating investment, particularly infrastructure development.

He said it should announce consistent policies, not populist policies, on necessary issues, such as energy, foreign exchange and mega-projects, to boost investor and consumer confidence.

It is necessary to build up confidence in the private sector, which has become the key engine to drive economic growth, accounting for about 80 per cent of total gross domestic product, he explained.

He also suggested the new government establish a treasury centre, to manage capital circulation and curb the baht's rise more efficiently. "If the government focuses only on boosting exports, the baht will grow stronger," he said.

"They should balance imports and exports by encouraging operators to put in more investment and import more machinery and technology to improve their production process."

Narongchai said the US dollar would become even weaker next year. Therefore, exporters should trade in other currencies, such as the euro. "If the 30-per-cent withholding reserve requirement were ended, I think we would certainly see the baht at 30 to the dollar."

 Chalida Ekvitthayavechnukul

 The Nation