Thai Referendum: Private Consumption To Be The Early Beneficiaries Of A “Yes”

Economic Research	02 August 2016
Thailand
Economic Highlights
Thai Referendum: Private Consumption To Be The Early Beneficiaries Of A “Yes” Vote  Thailand heads to the polls on 7 August to vote on a new constitution. The latest draft, the 20th since the end of “absolute” monarchy in 1932, includes several economic reforms which focus on the development of knowledge- and technology- intensive industries, the need to boost international competitiveness, and participation in various economic groups. The charter also calls for tax reforms to correct income inequality and the establishment of a mechanism to support SMEs and startups. Although polls are still inconclusive (see Figure 1), the trend does show rising approval for the military government since the fifth poll. In the advent of a “No” vote, the charter will need to be amended, which could delay general elections by another 4 months. If the charter is accepted a general election could be held as early as 3Q 2017. In any case, the ruling junta government will remain in power for another year at least, with the stability useful in ensuring that Thailand’s THB20bn megainfrastructure project is further entrenched. We maintain our GDP projection of +3.2% in 2016 and +3.5% in 2017 for the time being, but may revise the latter upwards in the event of a “Yes” result. Economist:  Ng Kee Chou  | +603 9280 2179
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