BANGKOK Investor confidence in Thailand's stock market has hit a seven-month high boosted by the formation of a new government, although China's slowing economy is a concern, a survey by a capital markets group showed on Wednesday.

Thailand's king swore in the new 11-party coalition government on Tuesday after a prolonged period of political uncertainty since an election in May.

An August survey by the Federation of Thai Capital Market Organizations (FETCO) showed its overall investor confidence index jumped 69.3% to 141.27 from 83.45 in the July survey, moving to "bullish" from "neutral".

Foreign investors' confidence alone surged 87.5% from the July survey, moving to the bullish zone from the bearish zone, the FETCO said in a statement.

The benchmark stock index has fallen about 7% so far this year, with foreign investors selling about 138 billion baht ($3.9 billion) net of Thai shares. Last year, they bought 202.7 billon baht worth of stocks.

Thailand may see more foreign fund inflows following eased political uncertainty with its new government installed, FETCO chair Kobsak Pootrakool told a briefing.

The government should introduce measures late this year to stimulate the economy, he said.

"What should be done is driving the tourism sector which does not need large spending," he added.

On Tuesday, Prime Minister Srettha Thavisin, who is also finance minister, said his government would focus on addressing people's needs, as it seeks to lift a weakened economy and deliver key campaign promises.

Southeast Asia's second-largest economy grew 1.8% in the April-June period year-on-year, sharply slowing from the previous three months, and the central bank is planning to revise down its 2023 growth projection.

($1 = 35.48 baht)

(Reporting by Orathai Sriring and Kitiphong Thaichareon; Editing by Stephen Coates)