Srettha Thavisin, a property tycoon turned prime minister of Thailand, is confronted with the formidable task of revitalizing the country’s sluggish economy, a key pledge he must fulfill to restore the reputation of his party, Pheu Thai. The party, known for its populist policies, aims to implement various economic stimulus measures to regain public confidence and address criticisms concerning its ascent to power.
With a coalition government consisting of 11 parties, doubts have arisen about Thavisin’s ability to effectively lead and maintain unity within a diverse coalition, particularly when many factions are linked to the military and the former ruling camp. The challenge is further complicated by the need to bridge the gap between economic recovery and the complex political landscape.
Analysts predict that the new Pheu Thai administration will prioritize economic revival once the cabinet is formed and the government is established. Their commitments include implementing stimulus measures such as a THB10,000 (US$285) digital cash handout, raising the daily minimum wage, and ensuring a minimum monthly income for households.
Trade is also expected to play a role in driving economic growth, as Pheu Thai plans to reduce tariff and non-tariff barriers. The Thai economy recently experienced a slowdown, with GDP growth reaching 1.8% in the second quarter of 2023, down from 2.6% in the first quarter. The government has adjusted this year’s GDP forecast to 2.5-3.0%, reflecting expected challenges in exports.
Despite political uncertainties, the installation of a new prime minister is anticipated to contribute to economic improvement and reduce post-election uncertainty.
Pheu Thai’s economic ambitions are intertwined with its efforts to repair its image after forming an alliance with the old ruling camp. The party’s campaign promise of achieving at least 5% annual GDP growth seeks to counterbalance its controversial decision to ally with various factions, including military-aligned parties. This shifting coalition landscape has underscored the intricate relationship between economic goals and the complex political environment in Thailand.