Thailand's new finance minister resigns amid economic crisis

BANGKOK: Thailand's recently appointed finance minister, Predee Daochai, has resigned as the government struggles to pull Southeast Asia's second-largest economy out of a slump caused by the COVID-19 pandemic.

The banking veteran took office just last month as Prime Minister Prayut Chan-o-cha shook up his economic team to address the drop in demand and the devastation suffered by the country's vital tourist industry.

Predee, 61, did not respond to telephone calls from Reuters, and it was not immediately known why he resigned. Thai media said he wanted to quit for health reasons.

His resignation was confirmed by an official announcement in the country's Royal Gazette.

Earlier news that Predee had proffered his resignation prompted the stock market to fall as much as 0.9 per cent, but it had recovered by the close to stand less than 0.4 per cent down.

Predee's departure would created uncertainty in policy-making as the government rolls out billions of dollars of stimulus to aid the economy through the pandemic.

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"Therefore, this event is rather a major disappointment," said Kobsidthi Silpachai, head of capital markets research of Kasikornbank. Uncertainty over who will be finance minister would undercut private-sector confidence, he said, and could raise concerns over political stability.

Thailand's economy shrank by 12.2 per cent in the second quarter, its worst contraction since the Asian financial crisis more than two decades ago.

Its economy is expected to contract by a record 8.5 per cent this year, according to the finance ministry.

"We were hoping the minister would help with soft loan problems, but there may be no chance now," said Chairat Triratanajaraspon, president of the Tourism Council of Thailand.

It was announced on Aug 6 that Thailand's king had approved Predee's appointment as finance minister.

Predee was co-president of Kasikornbank before leaving the lender to join the Cabinet.

He had worked for Kasikornbank for 38 years and graduated with law degrees from Thammasat University and a master’s degree in law from the University of Illinois.

Though Thailand has so far reported only 3,417 coronavirus infections and 58 deaths from COVID-19 and has lifted most restrictions, its economy has been hit badly, in particular tourism.

Thailand is forecast to record less than a fifth of last year's record 39.8 million visitors, whose spending made up about 11.4 per cent of GDP.