King Vajiralongkorn confirmed that elections would be held in early to mid-2019. Afterwards, the civilian government will continue to face strong military influence over policy. Government policies are likely to continue to focus on infrastructure investments and fast-tracking PPP projects in key industries, and increasing government revenue through tax base expansion.

• Economic priorities remain the focus of major political parties and there is a high likelihood that current infrastructure projects and medium-term development plans will be continued by the new civilian government.
• In addition to pushing forward with PPP initiatives in selected industries, government priorities in the 12-month outlook will be on increasing the tax base and strengthening control over internet content.
• Military control over political decision making is likely to remain strong with a pro-military senate and national security council presence across Thai provinces.

On 12 September 2018, King Vajiralongkorn signed the Organic Acts on MP Election and Senatorial Selection, greatly increasing the odds of a general election taking place as scheduled in 2019. The Organic Act on MP Election will take effect 90 days from the signing date; after that the election must be held within 150 days. This means that the election must be held between January and late May 2019. Concurrently, IHS Markit sources indicate that there is high likelihood that preparation for King Vajiralongkorn's coronation is under way, which increases the likelihood of an election being held in mid-2019.

The ban on political activities placed by the National Council for Peace and Order (NCPO), Thailand's military government, remains in place. However, the NCPO has promised that the ban on political activities will be lifted in October 2018. This will follow a gradual process: parties will first be allowed to hold official meetings, appoint leaders, recruit members and amend party regulations. Campaigning will likely not be allowed until December 2018, as both Prime Minister Prayuth Chao-o-Cha and Deputy Prime Minister Wissanu Krue-Ngam have both express concerns about civil unrest. As a result, the period for campaigning is likely to be brief, which might benefit large, established parties such as Pheu Thai and Democrat Party, which have existing network of electoral operatives and voter canvassers, which newly created parties would need to replicate.

Increased pressure on government revenue expected

The incoming government is legally bound by the NCPO-designed 20-year development plan. It must adhere to strict fiscal discipline as prescribed in the 2017 Constitution, and failure to comply might cause dismissal of the ministers. As a result, existing plans are highly likely to be followed in the one-year outlook.

The new civilian government is likely to be led by the Pheu Thai party, which is expected to prioritize local livelihood issues, such as the provision of cheap housing and healthcare, and addressing rural poverty through government subsidies. This will place further pressure on government expenditure and will increase the likelihood of higher taxes to increase government revenues. So far, more than 600 new laws and regulations have been promulgated by the National Legislative Assembly (NLA). A key focus of the new policies includes broadening the tax base to boost government revenue. For example, the proposed e-commerce tax bill, currently going through a second hearing, and the more stringent regulatory requirements under the new hotel and condominium law are highly likely to be promoted and implemented under the civilian government, increasing cost of operations for businesses. Also, implementing the e-commerce bill requires significant technical capacity and resources that the current government lacks, and this increases uncertainties in tax collection in the one-year outlook.

Whichever party wins the general election, all existing contenders have made reviving the Thai economy a key election promise. As a result, it is highly likely that ongoing economic plans and infrastructure projects will be maintained in the 12-month outlook. This includes a portfolio of projects along the Eastern Economic Corridor (in which a law promoting the trade and investment of the region was passed in February 2018) and the 2017-2021 Strategic Plan for Public Private Partnerships (PPP). Under these schemes, private enterprises, including international firms, investing in key industries and projects are likely to receive favorable legal treatment and fast-tracked administrative processes. The prioritized sectors include:

• Transport, road and railways
• Ports and logistics
• Telecommunication and high-speed internet
• Water quality, irrigation and solid waste management
• Education, hospitals and public services
• Science, Technology and Innovation and the digital economy

Outlook and implications

Military influence in Thai politics will remain strong after the election of a civilian government. All 250 senators in the Upper House are military-appointed, and they will restrain the House of Representatives into steering policy-making along its current lines. If an anti-junta party, most likely the Pheu Thai Party, is voted into office, running an administration will be challenging as the military is likely to restrict the government's executive power through voting rights in the Senate. Furthermore, the military-controlled National Security Council now has a unit in every Thai province, with the power to intervene normal administration through stepping in and taking over decisions through national security justifications or lese majeste cases.

The formal announcement before the end of 2018 of a coronation date will increase the likelihood of general elections taking place on time before May 2018, as announced by the NCPO. Furthermore, incumbent Prime Minster Prayuth Chan-o-cha's decision on whether or not to remain involved in politics after the general election is expected to be announced in the coming month. In the past three months he travelled extensively to meet local politicians, to make pacts and form alliances. This is likely either to help him set up a proxy party to win an election or disrupt the normal political process to the point that he can be chosen as an outsider prime minister. However, on 1 September 2018, Apirach Kongsompong, from a different faction from Prayuth's, was appointed as the new Army Commander-in-chief; this signals that the military is uncommitted to Prayuth staying on, increasing the likelihood of a different NCPO leader being appointed after the election.

Any government attempts to limit political campaigning by political parties, such as allegations of electoral rules violations by the government against pro-democracy leaders, are likely to trigger largely peaceful, student-led marches attended by hundreds through the main commercial and government districts of central Bangkok. The police will be reinforced by thousands of military personnel who generally have strong fire discipline. Any use of tear gas, water cannon (live rounds are highly unlikely), however, would trigger larger protests in central Bangkok. These would disrupt already congested traffic around Ratchaprasong intersection and near the Supreme Court in Phra Nakhon district by hours but are unlikely to escalate to significantly threaten property.