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Uncertainty over new government stability dampens economic outlook, says SCB’s EIC
13 Sept 23:46 Key points summarised by AI
- Despite initial investor relief following Prime Minister Prayut Chan-o-cha's election, the new Thai government faces significant stability concerns due to a narrow parliamentary majority and challenges in reconciling diverse coalition party promises.
- This political uncertainty is expected to impede the progress of large-scale infrastructure projects and complicate the allocation of budgets for various long-term social welfare policies promised during the election.
- The SCB’s EIC recommends the government prioritize economic stimulus measures with strong multiplier effects, ensuring they avoid future fiscal burdens and market distortions, alongside efforts to strengthen small and medium-sized enterprises (SMEs).
- Government instability and the threat of coups are cited as major problematic factors for doing business in Thailand, reinforcing the negative sentiment impacting the overall economic outlook.
