Thai officials including PM Srettha downplay reports of government-central bank rift

Thai Prime Minister Srettha Thavisin. - Photo: The Nation Thailand/ANN

BANGKOK: Thai government officials sought to downplay media reports about growing differences between fiscal and monetary policies ahead of a meeting between Prime Minister Srettha Thavisin and Bank of Thailand Governor Sethaput Suthiwartnarueput.

"It’s a normal conversation. We will talk about all issues,” Srettha said on Monday about his upcoming talks with the central bank chief. Deputy Finance Minister Julapun Amornvivat separately said the government and the BOT have worked together well and that the two sides don’t have any disagreements, as he specifically referred to Srettha’s debt moratorium plan.

The remarks come amid speculation about a policy rift between the two after Srettha unveiled his economic stimulus plan at a time Sethaput was advocating for coordinated fiscal and monetary belt-tightening. Local media including Post Today and Krungthep Turakij have reported about the government’s displeasure with the BOT’s rate hike last week that took borrowing costs to a decade-high.

The BOT’s case for policy normalization is based on its assesment that the economy has momentum amid a rebound in tourism, and all it needs are policies that help attract investment and not measures to boost consumption.

Srettha, who also doubles as the finance minister, last month dismissed rumors that he’s planning to push out Sethaput and said he’s in touch with the BOT chief about aligning policies. The tycoon-turned-premier, in his interview with Bloomberg Television last month, said his government targets to speed up economic growth to 5% annually starting next year.

"We don’t have any conflicts with the central bank,” said Paopoom Rojanasakul, secretary to the finance minister, adding to the government chorus.

Srettha, on Monday, separately said that he will push ahead with a 560-billion baht ($15.2 billion) handout to the majority of Thai citizens early next year as well as increase the daily minimum wage to 400 baht once the economy improves.

The leader has earlier vowed fresh energy subsidies, three-year debt suspensions for farmers and small businesses and visa waivers for Chinese tourists.

The yield on benchmark 10-year bonds have soared about 50 basis points to near an 11-month high since Srettha was elected as prime minister in August, reflecting market concerns on the government’s rising financing needs. The local currency has weakened almost 5% in the past month, making it the worst-performer among 12 Asian currencies tracked by Bloomberg.

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