The government is working on a raft of fresh fiscal measures to sustain an economic recovery, foster new foreign investment and lower the near-record household debt, Prime Minister Paetongtarn Shinawatra's top aide said on Friday.
The economic stimulus panel chaired by the premier is set to consider the second phase of a cash handout plan and other steps at a meeting next week, according to Ms Paetongtarn's Secretary-General Prommin Lertsuridej. Easier rules for long-term land leasing and credit restructuring led by government banks are also on the anvil, he said.
The US$500 billion economy is in a much better shape than a year ago when the Pheu Thai-led coalition took power after almost a decade of military-backed rule, Dr Prommin said. Growth prospects appear brighter next year with private companies pledging to invest about $22 billion in the first 10 months of this year and visa waivers and other incentives boosting foreign tourist arrivals, he said.
The economy may expand about 2.7% this year, picking pace to 3% next year, he said, citing Finance Ministry estimates. Data due on Monday will show gross domestic product (GDP) rose 2.4% in the third quarter from a year earlier, according to a Bloomberg survey.
Mr Paetongtarn's administration has built on the efforts by her predecessor Srettha Thavisin to put Thailand on the radar of foreign investors, which has started paying off with multibillion dollar investment commitments from companies such as Alphabet Incorporated and Microsoft Corporation, Dr Prommin said. The country is leveraging its strength as a food processing hub to meet high market demand for valued added products, while also building its services industry including medical tourism, he said.
The new wave of investment is not only from the US firms, but Chinese companies like Huawei Technologies Company are also investing, Dr Prommin said. “That's the springboard for the future," he said.
Dr Prommin Lertsuridej greets reporters at Government House, Bangkok, on Sept 24, 2024. (Photo: Chanat Katanyu)
Dr Prommin, a former minister and close ally of former prime minister Thaksin Shinawatra, said investors need not fret over a barrage of legal petitions to oust Ms Paetongtarn and disband her party. The complaints posed no risk to the government, and it will complete its remaining three year-term, he said.
The Constitutional Court is set to decide if it should accept a petition by a lawyer to restrain Thaksin and his family-backed Pheu Thai Party, raising the specter of a fresh bout of political instability.
Central bank clash
Foreign investors have turned bearish on Thai assets with funds pulling out almost $3 billion from the country's stocks and bonds since the end of September. A feud between the government and the Bank of Thailand (BoT) over the appointment of a new chair has hurt the sentiment toward the baht amid a dollar rally in the wake of Donald Trump's United States election win.
Dr Prommin defended the government's right to nominate BoT chairman, saying the selection process was in accordance with the law. An independent selection panel is said to have picked Kittiratt Na-Ranong, a vocal critic of the BoT's hawkish monetary policy and a former member of the ruling party, as the new BoT chairman, Bloomberg reported last week.
Former finance minister Kittiratt Na Ranong. (Photo: Kittiratt Na Ranong's Facebook)
Mr Kittiratt's nomination is viewed by some analysts and former governors as a threat to central bank's autonomy and government bid to influence monetary policy. While the BoT chairman does not decide on policy, Mr Kittiratt will have a say in who joins the Monetary Policy Committee (MPC) and can assess the performance of the governor.
"The central shouldn't be independent from the people. That's the principle," Dr Prommin said. Fiscal and monetary policies should ultimately benefit the people, he said adding the mandate to support growth and stability should be balanced.
The government and the central bank have differed on the best way to boost the economy. While Ms Paetongtarn's administration is pushing for a lower interest rate to complement its expansionary fiscal policies, the conservative central bank has stuck to a cautious approach.
