ECONOMY BUSINESS SENTIMENT

Poll : Politics tops list of entrepreneurs' concerns

PHUSADEE ARUNMAS

Continuing political uncertainty has been singled out as the major threat to the country's economic growth and the overall business environment, according to a new survey.

The finding emerged in a survey conducted by the University of the Thai Chamber of Commerce of 800 entrepreneurs nationwide between March 7 and 16. It measured the factors that affect economic growth and business activity, ranging from interest and exchange rates to oil prices, political and security matters.

Lack of political confidence was the main factor behind the economic slowdown, followed by security concerns lingering from the unsolved Dec 31 bombings in Bangkok, said Thanavath Phonvichai, director of the university's Center for Economic and Business Forecasting.In the survey, 88.2% of the respondents said they were being hard hit by political instability, and 45.5% said they would suspend new investment. Only 2.9% said they would expand their businesses.

A total of 53.7% of the respondents said the government's priority should be to speed up addressing political instability. They also called for political reconciliation, a new general election and better transparency.

Respondents also urged authorities to attempt to keep the baht between 34.50 and 35.50 to the US dollar, although they said they would prefer an exchange rate around 37.50.

The baht was trading yesterday around 34.80 and survey respondents said they expected the rate to average 35 for the year.

Other recommendations from the survey were for the government to improve economic stimulus policy, make fiscal and monetary policy clearer, and increase competitiveness through logistics and infrastructure development.

''In the sample group, more than 50% said the economy would grow at a rate of less than 4% this year, now that the political uncertainties are expected to prompt investors and business community to draw back their investment and marketing plans. In the meantime, consumers are expected to delay their spending,'' said Mr Thanavath.

The university has projected that economic growth would range from 4.0% to 4.5% this year, while the National Economic and Social Development Board (NESDB) has a forecast of 4.5% compared with 5% in 2006.

However, Mr Thanavath said the university might consider revising the economic figures after Songkran festival.

Bangkok Post
Tuesday March 20, 2007