Thailand: Pheu Thai poised to win May 14 election, but govt formation still uncertain

• Pheu Thai, opposition MFP call for rewriting constitution, reforming military
• MFP may find it difficult to enter coalition due to royal insult law policy
• Military-linked UTN, PPRP most likely to be backed by the Senate
• UTN's main message is continuity, PPRP's - reconciliation and building national unity
• There are 52.29mn eligible voters

While the main opposition Pheu Thai Party leads in opinion polls and seems set to win the general election on May 14, it remains to be seen if it will win by a margin that is large enough to eliminate the need for forming a coalition. The new House of Representatives will comprise 400 constituency MPs and 100 party-list (proportional representation) MPs. After the election, Thailand's next prime minister will be selected jointly by the new House and the military-appointed Senate, which has 250 seats. The new PM will therefore need the support of at least 376 MPs and senators.

We remind that a military junta, led by General Prayut Chan-o-cha, had been in power over the period May 2014 - July 2019. After the general elections in 2019, a coalition government led by Prayut has been formed. In 2023, the House was dissolved on Mar 20 and the government has been functioning in a caretaker capacity since then.

The most fundamental differences between the political players concern their views about the 2017 Constitution and the role of the military. The Pheu Thai Party and the liberal opposition Move Forward Party (MFP) both call for constitutional reforms. They have been alleging that there are several flaws, one of which is the participation of the senators in the vote for electing a prime minister. The two parties also call for reforming the military and ending the compulsory conscription. Furthermore, the MFP, which ranks second in the opinion polls, calls for amending the strict royal insult law. This particular proposal may make the MFP a difficult party to form a coalition with, because this initiative seems to be unpopular with many of the supporters of the other political parties.

Thailand's GDP increased by 1.4% y/y in Q4, decelerating from revised 4.6% y/y growth in Q3. The latest result was well below consensus expectations of a 3.5% y/y expansion, according to a Reuters poll. In seasonally adjusted terms, GDP fell by 1.5% q/q in Q4, reversing a 1.1% q/q increase in Q3. The GDP rose by 2.6% in 2022, accelerating from 1.5% increase in 2021.

With regard to the economic growth in 2023, the BOT, the World Bank, the ADB and the IMF forecast it at 3.6%, 3.6%, 3.3% and 3.4%, respectively. This year's economic expansion is expected to be driven mainly by tourism and private consumption. The BOT projects 28.0mn foreign tourists in 2023 and 35.0mn in 2024. There were 11.2mn visitors in 2022 and 39.9mn in 2019. The headline inflation was 6.1% in 2022, well above the target range of 1-3%. The BOT forecasts inflation of 2.9% this year and 2.4% next year.

Thailand's new government will have relatively limited fiscal policy space because the public debt-to-GDP ratio is expected to be 60.6% in FY 2023, which ends on Sep 30. Other weaknesses of the country's economy include population ageing and high household debt. The household debt-to-GDP ratio was 86.8% at end-September, below a peak of 90.1% at end-2021. The ratio's sustainable level is 80% according to the Bank for International Settlements (BIS), the BOT reported.

MAIN POLITICAL PLAYERS

The?Pheu Thai Party?is the main opposition party. Its campaign slogan is "Think Big, Act Smart for All Thais." The party has vowed to raise the daily minimum wage to THB 600 by 2027. The party will also aim at starting monthly salaries of THB 25,000 for bachelor's degree holders within the same time frame. Other plans envisage reforming the bureaucracy, reforming the army and formulating measures to prevent future coups. The party promises tripling the farmers' income within four years. Pheu Thai also aims at increasing tourism income to THB 3tn. The party will aim at GDP growth of at least 5% per year. Earlier this month, the party vowed to distribute a THB 10,000 one-time handout to all Thais aged 16 year and over via digital wallets on Jan 1, 2024. Pheu Thai's three prime ministerial candidates are Paetongtarn "Ung-ing" Shinawatra, Srettha Thavisin and Chaikasem Nitisiri. Paetongtarn is the youngest daughter of former PM Thaksin Shinawatra.

The?Move Forward Party (MFP)?is a liberal opposition party. It is supported mainly by young people. Its leader Pita Limjaroenrat has promised to fight social inequality and end military conscription. On Mar 20, the MFP launched 300 election policies to reform the country. The party's nine objectives are to improve politics, welfare, quality of life, civil service, education, agriculture, environment, public health and the economy. It pledged to hold a referendum on amending Constitution in order to "prevent dictatorship". Another pledge is tap water of drinking quality nationwide. The MFP promises a daily minimum wage of THB 450. The party will also distribute coupons for skills training to 1mn workers aged between 30 and 60. Other proposals include monthly allowances for infants (THB 1,200) and the elderly (THB 3,000).

The?United Thai Nation (UTN) Party?is a conservative party registered in Mar 2021. PM Gen Prayut Chan-o-cha joined the UTN in January. He is the party's first prime ministerial candidate. UTN leader Pirapan Salirathavibhaga is the second candidate. A party can nominate up to three PM candidates provided it has at least 25 MPs. The UTN often ranked third in recent opinion polls. Its main campaign message is continuity. The party promises, among other things, to raise the monthly payments for state welfare cardholders and the elderly to THB 1,000. Businesses that hire people beyond retirement age will be given tax breaks. The UTN will also continue the shopping and travel subsidy schemes, Khon La Khrueng (Let's Go Halves) and Rao Tiew Duay Kan (We Travel Together). The party plans to establish a fund to maintain the price of agricultural products. Rice farmers will be offered a subsidy of THB 2,000 per rai. The UTN will continue the infrastructure upgrades in the country's economic corridors.

The ruling?Palang Pracharath Party (PPRP)?is a conservative political party led by Gen Prawit Wongsuwon. After the 2019 general election, the PPRP nominated Gen Prayut as its candidate for prime minister. With regard to the 2023 election, the party's PM candidate is Gen Prawit. One of his main messages is a call for reconciliation and building national unity. The PPRP promises the payment of a THB 700 monthly allowance to state welfare cardholders. It also plans to ease the cost of living by lowering the price of public transport, cooking gas and fuel. The party promises the payment of a monthly allowance of THB 3,000 to THB 5,000 to people aged above 60. Another intended policy is passing laws that cut bribery and raise tax revenues simultaneously.

The opinion polls show a relatively modest popularity of the PPRP. However, it will be a valuable coalition partner, because it is one of the two parties most likely to be supported by the military-appointed Senate. The other such party is the UTN. It is not clear how the Senate is divided in terms of support for Gen Prawit or Gen Prayut.

The conservative?Democrat Party?was founded in 1946 and is the oldest party in Thailand. It has been a junior partner in the latest ruling coalition, but some of its MPs defected to other parties. It promises crop price guarantee for five main crops. Another pledge is a THB 2mn subsidy for every village/community bank. The party envisages the creation of a THB 300bn fund for small businesses. It targets annual economic growth of 5%. The Democrat Party plans to make anti-corruption efforts an urgent item of the national agenda. Party executive Alongkorn Ponlaboot commented that corruption has reached crisis levels and tackling it requires a collective effort. The party firmly opposes permitting the recreational use of marijuana. Decriminalising cannabis for medicinal and economic reasons had been one of the key election pledges of fellow junior ruling partner Bhumjaithai Party prior to the 2019 general election.

The?Bhumjaithai Party (BJTP)?has been the second largest party in the latest ruling coalition. Its traditional stronghold is the north-eastern province of Buriram. It has welcomed quite a few former MPs who defected from the PPRP, the Pheu Thai Party, the MFP and the Democrat Party. Earlier this month, Bhumjaithai leader Anutin Charnvirakul said the party is likely to win at least 100 MP seats. He said previously that they aim to make the party the core of the next coalition. The party seems to maintain close links with the PPRP, but it also appears to be quite flexible about its future partners. One of Bhumjaithai's election promises is suspending rural debt. Some of the other pledges include providing free solar panels to every household and creating more than 10mn jobs. Cannabis decriminalisation remains one of the party's key policies.

OPINION POLLS

Most of the available recent surveys have been conducted by the National Institute of Development Administration (Nida Polls). The surveys asked separately which party the respondents would prefer when voting for constituency or party-list MPs. There will be 400 constituency MPs and 100 party-list MPs. The latter are elected through proportional representation. Most of the polls were conducted in certain Thai provinces. Recently, there was one nationwide survey, conducted from Mar 2-8.

An alternative opinion poll was conducted by the Suan Dusit Rajabhat University (Suan Dusit Poll) from Mar 1-17, before the dissolution of the House of Representatives. The poll's respondents included 10,614 people from all regions throughout Thailand. The nationwide Nida Poll and the Suan Dusit Poll agree that the top two parties are Pheu Thai and Move Forward. However, the Nida Poll reports the United Thai Nation as the third most popular player, whereas the Suan Dusit Poll reports Bhumjaithai. Another difference is that the Suan Dusit Poll reports stronger support for the Palang Pracharath Party.

Some of the parties have announced how many House seats they will strive to win. The Pheu Thai's latest target is 310 seats, up from 250 seats planned previously. The PPRP aims at 70 constituency MP seats at least. Bhumjaithai leader Anutin Charnvirakul said earlier this month that the party is likely to win at least 100 MP seats.

Meanwhile, the Nida Polls also asked whom the respondents would support for the position of prime minister. Paetongtarn "Ung-ing" Shinawatra of the Pheu Thai Party has been the most preferred choice in most recent surveys, including the nationwide one. She is the youngest daughter of former PM Thaksin Shinawatra. In the nationwide poll, Paetongtarn was chosen by 38.2% and was followed by Pita Limjaroenrat, leader of the Move Forward Party, with 15.8%. Gen Prayut Chan-o-cha of the United Thai Nation Party was third with 15.7% and was followed by Khunying Sudarat Keyuraphan of the Thai Sang Thai Party (5.1%), Pol Gen Sereepisuth Temeeyaves of the Seri Ruam Thai Party (4.5%), Jurin Laksanawisit of the Democrat Party (2.4%), etc. Some 9.5% said nobody was suitable.

LEGISLATIVE FRAMEWORK

The new House of Representatives will comprise 400 constituency MPs and 100 party-list (proportional representation) MPs. In March, the Election Commission (EC) published a new map of Thailand's 400 constituencies. Bangkok has the highest number of 33 constituencies and is followed by Nakhon Ratchasima (16), Khon Kaen (11) and Ubon Ratchathani (11). There are four provinces that have only one seat each. The Central region that includes Bangkok has 122 MPs. The lawmakers in the remaining regions will be as follows - South (60 MPs), North (37), Northeast (133), East (29) and West (19).

There are 4,781 constituency candidates and 1,898 party-list candidates, the EC said on Apr 8. There are 70 competing parties, all of which registered constituency candidates, whereas 67 registered list candidates. About 10 to 12 parties are expected to be represented in the new House of Representatives. A party must receive at least 1% of the total number of valid party-list votes cast in order to win a list-MP seat. There are also 63 prime ministerial candidates, proposed by 43 parties.

There are 52.29mn eligible voters, including 25.14mn men and 27.15mn women. Some 2.35mn people registered for advance voting, scheduled for May 7. The nationwide voter turnout at the 2019 general election was 74.84%. A recent survey found that about 85% of Generation Z - Thais aged between 18 and 26 - intend to vote on May 14. The EC said that the unofficial election result should be known by 22:00 on May 14. The official results of at least 95% of the constituencies must be announced no later than 60 days from May 14, according to the law.