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New Thai Government to Pursue Policies Championed by Junta

Updated on

New Thai Government to Pursue Policies Championed by Junta

 Port of Bangkok

 Port of Bangkok

Photographer: Dario Pignatelli/Bloomberg

 Port of Bangkok

Photographer: Dario Pignatelli/Bloomberg

Thailand’s new government said it plans to pursue a number of economic policies championed by the previous military administration as officials strive to revive growth.

Initiatives such as the $55 billion Eastern Economic Corridor project, which seeks to add infrastructure and spur high-technology industries, are among the priorities laid out in a policy statement published Sunday in Bangkok.

“Thailand has continued making progress in many areas of development,” according to the statement. “But this government will face challenges from volatility domestically and globally, from issues like an aging society, international trade and technological change.”

Sliding exports pose a threat to Thai economic expansion

Other key elements of the agenda include farm subsidies, welfare for people on low incomes, finding new export markets, attracting high-spending tourists and restructuring taxation.

The government expects annual budget spending of 3.3 trillion baht ($107 billion) -- about the current level -- and said fiscal policy will seek to provide a buffer against global volatility partly by creating domestic macroeconomic stability.

The administration also plans to get feedback from the public on whether to redraft parts of the military-backed constitution put in place under the junta.

The Cabinet sworn in last week faces the task of reviving Southeast Asia’s second-largest economy, after a slump in exports amid the U.S.-China trade war contributed to the weakest growth in the first quarter since 2014.

“Big businesses must be pleased with the continuity of key policies, such as infrastructure investment,” said Amornthep Chawla, head of research at CIMB Thai Bank Pcl in Bangkok. “We’ll have to wait and see how this government implements these policies. An economic stimulus package may be needed to boost weak local demand.”

Prayuth Chan-Ocha, the former army chief who led the junta for five years, returned as prime minister following a disputed general election in March.

He leads a sprawling governing coalition of 19 parties and is due to present the policy agenda to parliament on Thursday.

— With assistance by Suttinee Yuvejwattana

(Updates with comment from economist in penultimate paragraph.)