Private sector estimates economic damage at Bt120-Bt240bn
The private sector fears the economic growth could be shaved off by a percentage point, if a permanent government could not be formed within six months.
After the Joint Standing Committee on Commerce, Industry and Banking’s monthly meeting on Monday, Federation of Thai Industries chairman Payungsak Chartsutipol said that the growth forecast could be chopped by 2 percentage points if the political vacuum runs for a full year.
Without a permanent government in six months, damage is estimated at Bt120 billion while the amount would double if the vacuum stays for a year, he said.
He noted that this means Thailand’s economic growth this year would be below 3 per cent, much lower than the average 5-6 per cent forecast for Asean countries.
"Despite the election yesterday, the political differences are not far from over. It would take time to form the government and this would hurt economic activities - the manufacturing, capital goods imports, lower consumption and investment, as well as the tourism industry," he said.
He noted that new investment could also be delayed given that the Board of Investment’s board of directors saw its term expired in line with the government’s term. Without the new board, this would affect the approval of investment incentives to projects valued above Bt200 million.
The committee urged the government to discuss with the Election Commission over the temporary powre in approving the projects, which were screened and approved by the previous BoI board.
The committee also resolved that big corporations should lend a hand to small players.