BANGKOK (Bloomberg): Thailand’s newly-appointed Prime Minister Paetongtarn Shinawatra vowed to push ahead with a controversial US$14 billion cash stimulus plan as her cabinet finalized a blueprint to free Southeast Asia’s second-largest economy from a prolonged period of low growth and chronic household debt.
Paetongtarn, who was sworn in to office along with her 35-member cabinet on Friday, will present her government’s policy statement to parliament next week. It is expected to spell out details of the long-delayed cash handout and her administration’s agenda to promote tourism and foreign investment.
The government will ensure that the so-called digital wallet program that promises 10,000 baht ($296) each to about 50 million adult Thais adheres to law, Paetongtarn told reporters after a meeting of the cabinet. About 14.5 million people, including 1 million with disabilities, may be covered in the first phase of the program in September after the new leader ordered a review of the plan, according to officials.
The 38-year-old Paetongtarn is Thailand’s youngest leader and was picked by the parliament last month to head a coalition government led by her Pheu Thai party and backed by a clutch of conservative groups. Her elevation came after her predecessor Srettha Thavisin was dismissed by a court over an ethical violation.
Paetongtarn on Saturday urged her cabinet to continue some of the policies pursued by Srettha’s administration to stimulate the economy, boost tourism, lift prices of farm goods and tackle the seasonal menace of floods.
Southeast Asia’s second-largest economy is forecast to expand 2.5% this year, below the 5% to 6% pace seen in neighboring Indonesia, Malaysia and the Philippines. Thai economy expanded an average 1.9% in the past decade under a military-backed government, and is now stifled by burgeoning public and household debt, sluggish exports and a high cost of living.
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Paetongtarn, the youngest daughter of former leader Thaksin Shinawatra, may also make her government’s stance clear on how to regulate the nascent cannabis industry that’s seen several policy u-turns when she unveils the policy statement. Besides, she’s also expected to lay out a roadmap to legalize casinos to draw high-spending tourists.
The third member of the influential Shinawatra clan to lead Thailand, Paetongtarn said Thaksin won’t be interfering in running her government, though she may turn to him for advise occasionally.
Paetongtarn also faces the challenge of keeping her unwieldy coalition of conservative and pro-royalist parties together while reassuring investors that she can attract foreign investment into high-tech industries and help sustain a fragile economic recovery.
Thailand’s financial markets have cheered the end of the months-long political turmoil and the smooth passage of the state budget this week. The benchmark SET Index has climbed almost 11% since Paetongtarn was nominated as the new leader on Aug. 15 and the baht has gained 4% during the period, reaching its highest level in more than a year.
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