Dec. 30 (Bloomberg) -- Thai Prime Minister Abhisit Vejjajiva said he would fight an economic slump and heal the nation’s political rifts as he outlined the government’s agenda in a maiden policy address that had to be shifted amid protests.

“We will aim to bring Thailand back to unity and help the country weather economic hardship,” Abhisit said in a televised broadcast before lawmakers at the foreign ministry, warning that the number of unemployed may double to 1 million next year.

The Democrat Party leader, elected by lawmakers two weeks ago, faces the twin challenges of defusing tensions with supporters of former premier Thaksin Shinawatra and reviving economic growth battered by political turmoil and the global recession. Abhisit is the nation’s third premier in four months.

“There is a huge rift in the nation,” said Carl Rajoo, an economist at Forecast Singapore Pte. “Policy makers need to show they have the ability to handle the economy because risk- aversion is so high.”

Thailand is split between two camps: one backing Thaksin and his allies, which relies on the nation’s rural majority for support, and yellow-clad urban and royalist elites. At stake is control of the government and rival visions of the country’s democracy, with Thaksin endorsing a more populist system.

The Thai baht snapped a seven-day slump on the policy address, gaining 0.4 percent to 34.88 as of 11:45 a.m. in Bangkok, according to data compiled by Bloomberg. The benchmark SET Index rose for a fourth day, climbing 1.1 percent, paring this year’s loss to 47 percent.

Red-Shirts Protest

Abhisit, 44, was forced to move the venue for today’s address, which is required by the constitution, to the ministry from parliament after that site was ringed by thousands of red- shirted pro-Thaksin supporters for two days. Police failed this morning to clear a pathway to the parliament building, using their shields to press in vain against the protesters.

“The government will offer additional funds to villages to develop infrastructure, such as reservoirs, roads and tap water,” Abhisit said in the hour-long speech. “We will also protect the monarchy as the country’s main institution.”

Thaksin’s supporters have been angered by the loss of two of their administrations earlier this year after both prime ministers were removed by the courts and undermined by months of royalist protests, including the seizure of Bangkok’s airports.

Military Coup

Thaksin, ousted in 2006 by a military coup, lives overseas after being convicted for abuse of power. He has rallied his supporters this year in mass gatherings using videotaped or broadcast messages.

The main opposition party may challenge the validity of the policy address in the Constitutional Court because of the switch in venue, Vittaya Buranasiri, the chief whip for the Puea Thai party, said in an interview. The speech “may have violated the constitution because of the change,” Vittaya said.

“People are probably glad he can give his speech and that after this the government can do its job and come up with the fiscal stimulus package,” said Paisarn Lertkowit, a trader at Bangkok Bank Pcl, the country’s largest lender.

Abhisit last week said the government will spend 300 billion baht ($8.6 billion) to help counter the economic slump. Exports and tourist arrivals would likely fall next year, the prime minister said in the policy address.

Thailand’s economy may contract about 2 percent this quarter, Somchai Sujjapongse, a senior finance ministry official, said on Dec. 17. That will be the first quarterly contraction since the three months ended March 31, 1999.

The foreign ministry building is about 3 kilometers (1.9 miles) from parliament in central Bangkok, the Thai capital. Prime Minister Abhisit had said yesterday that there was no plan to change the venue for his maiden speech.

“This government will last for some time,” said Chris Baker, a Bangkok-based historian who wrote “A History of Thailand” with Pasuk Phongpaichit. “The elite support will survive.”

To contact the reporters on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net; Rattaphol Onsanit in Bangkok at ronsanit@bloomberg.net.

Last Updated: December 30, 2008 02:33 EST