Ishiba: don't think there has been a political vacuum so far

Ishiba: don't think there has been a political vacuum so far

Title: Thailand's Economic Outlook Amid Political Uncertainty and Inflation Targets

Thailand's economic landscape is grappling with significant challenges as political deadlock and inflation targets loom large. The private sector, particularly industry leaders, are expressing concerns about the potential exacerbation of the economic slowdown due to an impending political vacuum [1]. Speaking at a Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) meeting, Poj Aramwattananont, chairman of the Thai Chamber of Commerce, warned that Thailand could face a political vacuum for at least six months, regardless of whether the House is dissolved or a new premier is announced [1]. This political uncertainty is compounding the economic slowdown, with potential impacts on both short-term and long-term national challenges [1].

The political vacuum could worsen Thailand's economic slowdown and increase the number of vulnerable borrowers, particularly among self-employed individuals and small businesses [1]. The JSCCIB has been working with the Bank of Thailand, the National Economic and Social Development Council, and the Fiscal Policy Office to project the impact of US trade policies and establish a framework to restore confidence and drive economic development [1]. This collaboration has led to the creation of "Reinvent Thailand," a platform focused on sustainable policy implementation and long-term growth [1].

In addition to political uncertainties, Thailand is also facing inflation targets set by the Finance Ministry and the Bank of Thailand (BOT). The two sides have agreed on an inflation target of between 1% to 3% for next year, aiming to maintain price stability and coordinate economic policies [2]. The Memorandum of Understanding (MoU) between the Finance Ministry and the BOT underscores the importance of preventing deflation and ensuring that inflation remains within the target framework [2]. Regular consultations and the use of multiple tools by the BOT, including policy rates and measures to protect the baht's value, are part of the strategy to achieve this goal [2].

While the political vacuum persists, the private sector and financial institutions are calling for clear policies and a solid government to build confidence both domestically and internationally. Experts argue that addressing the housing crisis in the US, for example, requires fundamental changes in home construction policies rather than just lowering mortgage rates [3]. Similarly, Thailand's economic recovery will depend on addressing both internal and external factors, including political stability and effective policy implementation.

References
[1] Bangkok Post. (2025). Industry leaders fear political vacuum amid slowdown. Retrieved from https://www.bangkokpost.com/business/general/3098336/industry-leaders-fear-political-vacuum-amid-slowdown
[2] Morningstar. (2025). 5 ways the Trump administration could use $2 trillion. Retrieved from https://www.morningstar.com/news/marketwatch/20250906240/5-ways-the-trump-administration-could-use-2
[3] The Nation. (2025). Finance Minister and BOT agree on inflation target. Retrieved from https://www.nationthailand.com/business/economy/40044527