THE CENTRE for Economic and Business Forecasting at the University of the Thai Chamber of Commerce (UTCC) estimates that the general election scheduled for February 2 will generate spending of between Bt40 billion and Bt50 billion as a result of political parties’ activities, director Thanawat Polwichai said yesterday.
Such additional spending would increase next year’s gross domestic product by between 0.3 per cent and 0.4 per cent, he said.
The spending estimate assumes that all political parties will participate in the coming election.
“Thailand has been confronting an economic downturn, which causes the consumption sector to slow down. Although people still have savings, they are not spending, as they have confidence in neither the domestic economy, nor the political situation.
“The coming election will at least allocate money into the market and stimulate domestic consumption,” said Thanawat.
However, in another scenario, it might be that many political parties do not participate in the general election, as they want the country’s politics, society and economy to be totally reformed and for corruption to be firmly tackled in advance before an election is held.
If fewer political parties get involved in the national election, the money spent by the parties on election activities will be less as well – at about Bt20 billion only – he added.
Businesses benefiting from a general election include those involved in posters and other print activities, advertising, radio, television, newspapers, websites, apparel, beverages, automobiles and motorcycles, audio equipment, and event-organising.
Thanawat said his centre estimated the total economic loss from the current political conflict at between Bt20 billion and Bt30 billion so far, particularly from the decline in the number of foreign tourists, which have fallen by more than 100,000 a month.
“With the political demonstrations, which may be prolonged to the end of the year, the country’s GDP is anticipated to grow by about 3 per cent this year, and by up to 4.5 per cent next year.
“We expect that tourism will be a key sector in stimulating the economy. The overall economy should be good in the third and fourth quarters of next year, after awaiting the policies issued by the new [post-February poll] government, especially in the investment sector,” he added.
Meanwhile, Federation of Thai Industries (FTI) vice chairman Thanit Sorat said that in the view of the private sector, House dissolution should reduce the political pressure stoked by the massive number of people participating in the rallies this past Monday.
“The dissolution of the House also helps reduce tension in the economy. In the waiting period for a new government, the economy will be mobilised by the private sector itself, while the government is just a supporter [of the economy],” he said.
“However, we don’t think domestic consumption will be significantly expanded, as reflected by the Consumer Confidence Index, which has hit the lowest level for 22 months. The Office of the National Economic and Social Development Board has projected that this year’s consumption will rise by just 1.6 per cent, down from its earlier projection at about 6.5 per cent,” he added.
Puchong Nutrawong, secretary-general of the Election Commission of Thailand, said yesterday after explaining to the caretaker Cabinet about the terms and conditions for the general election, that the agency is ready for the coming poll, which will require about Bt3.8 billion to stage.
The higher budget is in line with the rise to about 100,000 in the number of polling stations around the country, serving around 48 million people that have the right to vote.
For the last election held in July 2011, the commission required Bt3.4 billion and set up 95,000 polling stations throughout the Kingdom, he said.