Forming a new government

Pheu Thai into the coalition government, he said.

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UNCHANGED PROJECTION

The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) projects 2026 GDP growth will remain unchanged despite the impact of the House dissolution and global economic uncertainty, said Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI).

The JSCCIB believes the economy will grow in a range of 1.6-2%, with exports contracting 0.5-1.5% next year.

"We maintained our growth projection," said Mr Kriengkrai, responding to concerns about the impact of House dissolution limiting the power of the caretaker government.

He said the FTI, a key member of the JSCCIB, agrees with the slow growth outlook, affected by the impact of severe flooding in the deep South in late November.

The devastating inundation, especially in Songkhla’s Hat Yai district, damaged factories and households. Losses were estimated at 20-30 billion baht, with potential ripple effects reaching up to 90 billion baht next year, according to Mr Kriengkrai.

While the House dissolution will lead to a time-consuming general election and the establishment of a new government, he said politics is not the only factor determining economic growth. Other circumstances, particularly changes in economic policies in the US, the world’s largest economy, can also strengthen or slow down the Thai economy.

Earlier this month the US Federal Reserve decided to lower interest rates again, causing the dollar to weaken, partly resulting in baht appreciation, which dealt a blow to Thai exports, said Mr Kriengkrai.

"Thailand depends a lot on exports, so it cannot avoid the impact of foreign exchange rate fluctuations," he said.

However, Fed chair Jerome Powell said further rate cuts are unlikely because the authorities have already lowered rates three times this year, according to media reports.

AWAITING A GREEN LIGHT