Thailand’s third government in 2 years sworn in after turmoil

[BANGKOK] Thailand’s new Prime Minister Anutin Charnvirakul and his Cabinet were sworn into office on Wednesday (Sep 24), paving the way for the country’s third administration in two years to outline its policy agenda before fresh elections are called in the coming months. 

The prime minister and 35 ministers took the oath of allegiance before King Maha Vajiralongkorn in a traditional ceremony at the royal palace in Bangkok. Anutin held his first Cabinet meeting on Wednesday night, which cleared appointments of some officials and a policy statement to be presented to the parliament next week. 

The swearing-in marked the culmination of a weeks long government formation process triggered by the Constitutional Court’s dismissal of former premier Paetongtarn Shinawatra over an ethics violation. Anutin’s conservative Bhumjaithai Party will lead a minority government, having relegated Paetongtarn’s rival Pheu Thai Party to the opposition.

Anutin, 59, has pledged to dissolve the lower house of parliament within four months after delivering the policy statement under a deal with the opposition People’s Party, which backed his bid for premiership without joining the coalition. The dissolution will pave the way for an early election to be held within 60 days. 

Fitch Ratings downgraded the country’s sovereign debt outlook to negative from stable, citing increasing risks to Thailand’s public finance outlook from prolonged political uncertainty combined with growth headwinds from slowing global demand, a delayed tourism recovery and household deleveraging. It retained Thailand’s ‘BBB+’ rating.

The new government is set to prioritise short-term economic stimulus to boost consumption, reduce costs of living, and help those struggling with heavy debt, besides taking steps to address a currency rally that’s threatening the nation’s exports and tourism. The measures are targeted at boosting support for Anutin and his Bhumjaithai Party ahead of the next vote. 

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Anutin’s Cabinet includes seasoned bureaucrat Ekniti Nitithanprapas as deputy prime minister and finance minister; Suphajee Suthumpun, former chief executive of hotel operator Dusit Thani as commerce minister; and Auttapol Rerkpiboon, a former chief executive of energy giant PTT, as energy minister. 

The move to put technocrats in charge of key economic ministries has helped boost investor confidence, after repeated periods of political instability in recent years cast uncertainty over policy direction. 

Thailand’s export-reliant economy is forecast to grow just about 2 per cent this year, as it faces headwinds of higher US tariffs and a strong currency. The baht, which earlier this month hit a four-year high, has gained about 7 per cent so far this year, becoming Asia’s second-best performing currency. BLOOMBERG