Whichever faction of parties comes together to form a new government, the business sector insists there is an urgent need to swiftly establish an administration.
Chookiat Ophaswongse, an honorary president of the Thai Rice Exporters Association, said the likelihood Move Forward Party leader Pita Limjaroenrat will become the next prime minister seems murky, and Thailand's political situation could be tense for a while.
POLITICAL VACUUM
"The stock market is likely to remain volatile, and we will have to wait and see if there will be any changes in the political factions forming a government. Regardless of which parties constitute the next government, the business environment should improve once it is established," he said.
Before a new government is formed, the political vacuum will continue. Foreign investors looking at Thailand might adopt a wait-and-see approach until a new government is established, said Mr Chookiat.
"If there are political protests, we have to see whether they will turn violent. If the protests remain peaceful, they are unlikely to have a significant impact on the economy, and rice exports can continue as usual," he said.
The average monthly export volume of rice is estimated at 700,000 metric tonnes for the remainder of the year, said Mr Chookiat.
"The private sector wants a government to be formed as soon as possible to build confidence among foreign investors. Having a stable government is crucial for maintaining confidence and dealing with budgetary issues, especially government spending, which can pose challenges for the economy," he said.
URGENT NEED
Sanan Angubolkul, chairman of the Thai Chamber of Commerce, said the chamber believes there will be a process of negotiation and mutual understanding going forward.
All parties will recognise the benefits to the country and support the formation of a new government as soon as possible, he said.
"The continued delay in forming a new government will affect setting up a cabinet and announcing the policies to parliament, which may take from August to September to finish," said Mr Sanan.
It takes time to prepare the national budget, which could be implemented in the second quarter of 2024, he said. This will affect the confidence of businesses and foreign investors, which is why the private sector wants a new government to be formed quickly so the Thai economy can grow as hoped, said Mr Sanan.
Visit Limlurcha, president of the Thai Future Food Trade Association, said amid a volatile global economy, businesses need to sell regardless of which faction forms the government.
According to Mr Visit, the private sector must seek direction and opportunities to enhance their business capabilities, including addressing and overcoming various operations obstacles.
He said companies are engaged in discussions to promote ongoing trade and business activities.
"The private sector wants the new government to continue existing policies, especially those relating to economic and export stimulus measures. This includes increasing trade facilitation, enhancing the country's competitiveness by accelerating the reduction of production costs, and promoting free trade," said Mr Visit.
"Other efforts should comprise expediting in-depth policy measures to promote exports in both existing and new markets, enhancing and upgrading entrepreneurs, especially small businesses, and improving the skills and capabilities of the workforce. New trade measures should be monitored to find sustainable strategies to drive the country forward."
DEADLOCK ANTICIPATED
Amonthep Chawla, the chief economist of CIMB Thai Bank (CIMBT), said if Mr Pita fails to secure the votes required to become prime minister according to the timeline in August, it may lead to political deadlock and economic turmoil.
Under such a scenario, it would impact the Thai economy on three levels. First, it may delay the fiscal 2024 budget disbursement, affecting government spending in the fourth quarter of 2023, he said.
Second, it could affect foreign direct investment in Thailand if investors shift their outlays to other Asean countries, especially Vietnam and Indonesia, said Mr Amonthep.
Lastly, given the uneven economic recovery and lower income among some segments combined with a projected drought, it could dampen the purchasing power of the household segment. To improve people's income, a new government needs to issue economic stimulus, he said.
"CIMBT assessed the economic impact excluding protests and political violence. We need to monitor the situation step-by-step," Mr Amonthep said.
WAIT AND SEE
Sisdivachr Cheewarattanaporn, president of the Association of Thai Travel Agents, said the vote result and delay in forming a government might lead to demonstrations, which discourage foreign tourists from visiting Thailand.
"If foreign tourists choose other destinations because of our instability, it would be bad news right when the industry hits the low season," said Mr Sisdivachr.
However, he said he still believes any protests will be peaceful as people are following the process to see who will be nominated as the next candidate to form a government.
Overseas travel agents are not concerned about the situation in Thailand at the moment, said Mr Sisdivachr.
Small protests will not disrupt tourism activities as political demonstrations are considered acceptable for global travellers, he said.
However, violent clashes between sides in public places, such as the yellow-shirt demonstrations that led to airports being closed, would severely damage tourism confidence, said Mr Sisdivachr.
He said a government should be formed by August in order to restart policies and marketing promotions that are stalled at the moment.
HIGH-END TOURISTS
Taniwan Koonmongkon, president of the Thai Restaurant Association, expressed concerns about the current situation, noting political instability is an obstacle to luring quality tourists with high spending power to Thailand, which indirectly affects the restaurant business.
She said this particular group of customers is especially sensitive to safety issues.
According to Mrs Taniwan, political rallies can significantly undermine the competitiveness of Thailand's tourism industry. Thailand competes with other Asean countries as well as more than 100 nations that actively promote their tourism businesses, she said.
Mrs Taniwan said the private sector, including the restaurant industry, must adapt to survive during this period of uncertainty. She suggested restaurants shift their focus from catering to large organisations to targeting smaller clients if the process of forming a new government takes an extended period of time.
"The new administration should maintain measures implemented by the previous administration, including efforts to attract high-spending tourists from the Middle East. I also have high hopes for an influx of Chinese tourists in the second half," said Mrs Taniwan.
"However, political unrest poses a significant threat to market sentiment and could potentially undermine these positive developments."
Additional reporting by Pitsinee Jitpleecheep
