New Finance Minister in Thailand Expected to Bring Stability to Volatile Markets – TradingView News

Thailand’s new finance minister, Pichai Chunhavajira, has sparked investor interest with a more collaborative approach towards the central bank, potentially paving the way for policy coordination to bolster struggling markets.

The Thai economy, heavily reliant on tourism and facing challenges due to China’s economic slowdown, has been grappling with low visitor numbers and high interest rates that are hindering domestic spending. The government has been pushing for rate cuts to stimulate the economy, but clashes with monetary policymakers over concerns about rising debt have created tension.

Foreign investors have been pulling out of Thai stocks, with net outflows totaling $5.5 billion last year and an additional $1.9 billion this year. The benchmark SET index has dropped by 4% this year, hitting three-year lows and making it the worst-performing market in Asia.

However, Pichai’s more conciliatory approach towards the central bank has raised hopes among market participants for potential stimulus measures and improved sentiment. The government recently approved a plan to increase the fiscal budget by 122 billion baht ($3.3 billion) to support economic recovery efforts.

Despite global and structural factors holding back rate cuts, Pichai’s emphasis on collaboration with the central bank and the government’s focus on fiscal spending and liquidity injections have raised expectations for a more coordinated approach to revive growth. With inflation below target and the economy showing signs of weakness, there is growing anticipation for policy measures to support the economy in the coming months.