BANGKOK: Thai former energy executive Pichai Chunhavajira was named the country’s finance minister on Sunday (Apr 28), facing a tough task to revive Southeast Asia’s second-largest economy.
Pichai, 75, an adviser to Prime Minister Srettha Thavisin, takes over from Srettha as finance minister and becomes deputy prime minister, the official Royal Gazette said, announcing his appointment by the king.
Pichai was the chair of the board of Bangchak Corp since 2012. He headed the board of the Stock Exchange of Thailand for less than three months this year and was on the central bank board from 2014 to 2017.
Lagging its regional peers, the Thai economy faces high household debt and borrowing costs, as well as China’s slowdown.
Gross domestic product unexpectedly shrank in the final quarter of 2023 from the third, while growth last year slowed to 1.9 per cent from 2.5 per cent in 2022. The state planning agency in February cut its 2024 growth forecast to between 2.2 per cent and 3.2 per cent from a previous 2.7 per cent-3.7 per cent projection.
Pichai will oversee policies including Srettha’s flagship 500 billion baht (US$14 billion) handout scheme, which would transfer 10,000 baht to each of 50 million Thais to spend in their communities.
The controversial stimulus has been delayed to late 2024 due to a lack of funding and concerns about the impact on public debt, with economists and some former central bank governors criticising it as fiscally irresponsible.
The government, rejecting that criticism, is forging ahead with the scheme, although the central bank recommends it be targeted only towards vulnerable groups.
Srettha, a real estate mogul and political newcomer, has been finance minister since taking office last year.
He has been at loggerheads with the Bank of Thailand over the direction of monetary policy, repeatedly asking it to cut rates to help an economy he describes as at a “critical” stage.
The central bank has resisted that pressure, leaving its key interest rate unchanged at 2.5 per cent, the highest in more than a decade, for a third straight meeting in April. Its next rate review is on Jun 12.
Analysts said Pichai’s seniority and political and economic knowledge should help policy coordination with the central bank.
Pichai holds a master’s degree in business administration from Indiana University of Pennsylvania and also served as director at PTT Exploration and Production from 2001 to 2013.
