Foreign investors are more concerned about Thailand's longstanding political instability than the immediate economic impact of the ongoing conflict in the Middle East, according to feedback from business leaders in Singapore.
Singapore recently hosted a series of meetings with executives and investors, where sentiment towards Thailand remained cautiously optimistic over the long term but clouded by governance concerns, according to Umesh Pandey, a former Thailand trade representative who attended the meetings.
In discussions involving more than two dozen executives over two days, the most frequently raised question was how long Thailand's new government would remain in office, he said.
The new administration, led by Prime Minister Anutin Charnvirakul, commands 293 seats in the 500-member parliament, suggesting a degree of parliamentary stability.
However, investors continued to question the durability of the governments, citing the removal of two administrations between 2023 and 2025 and the possibility of further political disruptions, including judicial interventions that could affect policy continuity, said Mr Umesh.
Analysts say such concerns are difficult to address given Thailand's political track record, although some expressed the view that the current government is less likely to face similar challenges unless significant missteps occur.
Beyond political risks, investors are closely watching the policy direction of the new administration. Many said they would wait for the government's formal policy statement before making decisions, noting that Thailand faces increasing competition from faster-growing regional economies. Business leaders, particularly in the fast-moving consumer goods (FMCG) sector, also raised concerns about weakening domestic purchasing power. Several global FMCG firms maintain regional headquarters in Singapore.
Executives in the alcoholic beverages sector expressed support for recent regulatory changes under the previous administration, including adjustments to import tariffs and sales restrictions, and voiced hope that these policies would remain in place.
Market participants generally expect policy continuity, particularly as the Pheu Thai Party remains part of the governing coalition. On external risks, questions were raised about the potential economic impact of the Middle East conflict. However, investors noted that the situation is global in nature and not unique to Thailand.
Thailand's energy security measures, including maintaining around 100 days of reserves and efforts to diversify sources of liquefied natural gas and crude oil, were viewed positively by business leaders.
Some bankers also pointed to a potential opportunity for Thailand to attract financial flows relocating from Dubai amid the conflict. They noted that Thailand had missed a similar opportunity during the outflow of capital from Hong Kong during the Covid-19 period, but could position itself more effectively this time if it aims to strengthen its role as a regional financial hub.
