Thailand’s finance minister submitted his resignation less than a month after hetook office, injecting more uncertainty into an economy already reeling from its worst crisis in decades.
The resignation of Predee Daochai, a former co-president ofKasikornbank Pcl, will be effective from Sept. 2, according to a Royal Gazetteannouncement on Tuesday. Predee, 61, was named as the new finance minister on Aug. 6 andjoined Prime Minister Prayuth Chan-Ocha’s Cabinet on Aug. 12.
The government didn’t give a reason for Predee’s resignation, but Thai-language newspaper Khaosod reported earlier that he was quitting for health reasons, citing an unidentified government official.
The benchmark SET index of stocks fell as much as 0.7% before closing 0.4% lower, while the baht pared gains of as much as 0.6% on news of the minister’s resignation to end 0.1% higher at 31.077 to a U.S. dollar.
The economy is on track for its worst contraction on record, with the Finance Ministrypredicting an 8.5% decline this year as the nation’s key growth drivers of tourism and trade slump. Prayuth made several changes to his economic team last month to help shape the government’s response to the economic crisis. But Predee’s resignation will now hurt investor confidence, according to Amornthep Chawla, head of research at CIMB Thai Bank Pcl in Bangkok.
“The urgent task for the government now is to restore confidence. They need to find a qualified replacement who has good background and is accepted by the market,” Amornthep said. “Investors are still waiting to see the continuation of the existing economic policies drafted by the last economic team and they haven’t got the answer yet.”
The central bank is also facing a shake-up. Sethaput Suthiwart-Narueput will take office as governor to replace Veerathai Santiprabhob when he leaves at the end of his term this month. While the government has announced stimulus worth $60 billion and the central bank lowered interest rates to a record low, it may take the economy at least two years before returning to the pre-pandemic level, according to the Bank of Thailand.
“There is an urgency now for having a well-functioning economics team because many of the ad-hoc programs crafted back in April to cushion the downside from Covid-19 measures are finishing soon,” said Maria Lapiz, head of research at Maybank Kim Eng Securities (Thailand).
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