Due to political uncertainty and worries over the establishment of a coalition of pro-democracy parties to form the government.
Thailand’s post-election selloff has been the steepest in twenty years.The coalition of Move Forward, which gained the most seats in the lower house of parliament, and its seven coalition partners is the one that is most likely to have enough seats to choose the next prime minister of Thailand.
Investors are worried since the timing of Thailand’s government formation has been pushed back to late July or early August. Main Points Due to worries about political squabbling, the post-election selloff in Thailand’s financial markets is the steepest in the previous 20 years.
Over the last five days, foreign investors have sold off more than $1.2 billion worth of Thai bonds and stocks.
The uncertainty has caused money to leave the region’s stock market, which has had a terrible year. The Move Forward party, which received the most votes and seats in the lower house of parliament.
Has promised to increase wages while lowering energy costs, which has negatively impacted the future for the industry.
Investors might have to wait until August to see whether a coalition of pro-democracy parties can form the government, which would cause them to keep pulling their money out until it is known who would be in charge.
This has caused money to leave the country, which has negatively impacted Thailand’s stock market’s performance this year and caused the baht to depreciate versus the dollar.
Although the coalition has formally announced its alliance, investors might not have a clear understanding of the new leadership until August, which would cause turbulence in Thailand’s financial markets. Possibility of political void Investors are wary until there is clarity about the new leadership, despite the coalition formalizing its partnership on Monday and official economic figures showing better-than-expected first-quarter growth.
11 days in a row, investors have sold Thai stocks, taking 25 billion baht with them. The Election Commission must declare the official results and certify 95% of the lower house seats within 60 days of the election. Following Sunday’s elections, which may have left a leadership vacancy, Thailand’s commercial sector is worried about political stability.
Some companies are counting on the Move Forward Party to quickly establish a government and maintain the viability of important economic initiatives like the Eastern Economic Corridor. There are worries that the party’s pledges to boost the minimum wage and provide cash handouts may have a negative impact on the economy.
The Office of the National Economic and Social Development Council has issued a warning that any new budget must be prepared with financial restraint because growing wages could increase expenses and harm foreign direct investment.
