Prime Minister Srettha Thavisin will relinquish his role as finance minister, according to a media report, a change that may ease tension with Bank of Thailand (BoT) over monetary policy.
The former property tycoon may appoint Pichai Chunhavajira as the new finance minister, Krungthep Turakij reported Wednesday, without saying where it got the information. Mr Pichai, who was appointed chairman of the Stock Exchange of Thailand (SET) last month, is Mr Srettha’s close confidant and is seen capable of urgently implementing the government’s economic policies, the newspaper reported.
Mr Srettha’s busy schedule has hindered the Finance Ministry’s ability to carry out new economic policies, and the appointment of a new minister will help ease the premier’s workload, according to the report. The prime minister has repeatedly denied that a cabinet revamp was in the offing, saying members of his seven-month-old administration were doing well and need more time to prove their mettle.
Picking Pichai, a capital markets veteran, as finance minister may help ease tension between Mr Srettha’s administration and the central bank with which the prime minister has frequently clashed on approaches to reviving Southeast Asia’s second-biggest economy. BoT Governor Sethaput Suthiwartnareuput has snubbed Srettha’s call to cut interest rate as a quick-fix to accelerate economic growth amid a spell of negative inflation.
Challenges awaiting the new finance minister include a plan to hand out 10,000 baht (US$280) in cash to 50 million individuals as part of a goal to boost consumption. The move, a key election pledge of Pheu Thai Party that heads the coalition, has been criticised by economists and the central bank as inflationary and one that poses a risk to fiscal consolidation.
Pichai Chunhavajira, an adviser to Prime Minister Srettha Thavisin. (File photo)
"It's a good move to have a new finance minister as managing two key jobs at the same time is very challenging," said Burin Adulwattana, chief economist at Bangkok-based Kasikorn Research Center (KRC). "The finance minister should be the one who understands the overall economic picture and can balance between short-term and long-term measures. Having a new minister may also help ease the tension with the central bank."
Thailand's economy grew 1.9% last year, lagging the growth rate of its peers in the region. Mr Srettha wants to lift the pace of expansion to 5% annually and has unveiled a raft of measures including visa waivers to boost tourism and courted investors worldwide to attract foreign direct investment.
The sluggish growth outlook and government-central bank clashes have rattled foreign investors, prompting them to dump a net $1.5 billion of Thai bonds and stocks so far this year. The baht has gone from being the best performer in Asia in the final quarter of 2023 to the worst this year after its 4.4% decline against the dollar.