InfoQuest (March 21) -- TMB Analytics (TMB) pointed out that in the short run the general election will not shock the economy system. Looking back to economic indexes during the 2001 general election, it can be found that the growth rate of personal consumption in the previous quarter remained nearly the same as that in the next quarter, with an average increase rate of 2.3 percent and 2.2 percent respectively. During this period, private investment sank from 6.7 percent to 3.1 percent after the election, and the policy implemented by the newly-elected government would have promoted personal consumption and private investment in the next three to four quarters.
Moreover, TMB Analytics noted that personal consumption this year sees a year-on-year decline. It is expected that the increase rate will drop from 4.6 percent to 3.5 percent, which is due to the rising debt from car purchase and low income of farmers.
In brief, private investment is likely to become the pillar driving force for the growth of Thai economy again, even if it has not established a close bond with the general election in the past. However, the conditions change this year. Based on the analysis of previous investment in Thailand, it can be found that investment still remains low. The actual investment now in Thailand is even lower than that during Tom Yum Kung crisis 22 years ago. Besides, in Thailand, Capital Utilization Rate (CAPU) nearly reaches the limit, especially in the car industry and chemicals industry, where CAPU exceeds 80 percent. It is an important index which shows the country has been in a position to expand investment to enhance its competitiveness in the future.
Moreover, the environment is also favorable for investment, including low interest rates and government policies to boost investment, such as EEC (Eastern Economic Corridor) and policy to develop transportation infrastructure. These efforts all aim to promote competitiveness of the country. And commerce is dependent on the economy. Since 2017, Business Confidence Index has exceeded 50 percent every year, and FDI has risen to 400 billion baht in 2018, higher than the net FDI in 2017 by 270 billion baht.
These indexes show that private enterprises are ready to make investment. Therefore, no matter which party will come into power, the major task for the government is to create a favorable investment environment to shore up private investment and keep the continuity of government investment policy. Above all, the government should ensure political stability and make government policies clear. And preparing some technicians in business sector can also promote competitiveness of Thai economy.
Source: InfoQuest, by Tanawat Suayaem/ Rachada, translated by Xinhua Silk Road
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