A delay in the formation of new parliament could affect Thailand's economy due to the constraints on fiscal spending and subdued confidence in economic policies, according to a local media report on Tuesday

The new election date of Oct. 22 set by the Election Commission (EC would delay the 1.476-trillion-baht (38.84 billion U.S. dollars) budget for the 2007 fiscal year until after the new House is convened, because until then the caretaker government will not disburse the fiscal budget based on the budgetary framework for the current fiscal year, Secretary-General Ampon Kitti-ampon of the National Economic and Social Development Board (NESDC) was quoted by the Bangkok Post as saying.

The budget procedure delay will have adverse efforts on investment in new projects and carried-over projects, the Secretary-General noted.

Caretaker government Finance Minister Thanong Bidaya also expressed concerns for the declining investment trend, by saying that the government is expected to introduce new measures to lessen the impact of rising interest rates and high oil prices with the aim to boost economy.

Meanwhile, Kartchai Jamkajornkeiat, vice president of the Thai Garment Manufacturers Association, said that the delay in the budgeting process for the 2007 fiscal year would have an impact on private investment.

He added that the protracted administration of the interim government would dampen confidence in economic policies, such as the clinch of free trade agreements.

Source: Xinhua