(Bloomberg) — Thailand is replacing the top two officials steering the economy through its worst crisis ever, injecting more uncertainty into the policy outlook.
Finance Minister Uttama Savanayana resigned July 16 ahead of a Cabinet reshuffle, with Prime Minister Prayuth Chan-Ocha saying he’ll announce a likely replacement by next month. At the Bank of Thailand, the search for a successor to Governor Veerathai Santiprabhob is entering the final stages, although the Cabinet changes may delay that process. Veerathai, 50, has declined to seek a new term when his current one ends in September.
The upheaval comes at a time of heightened uncertainty in the global economy and a slump in export- and tourism-reliant Thailand that’s among the worst in Asia. The finance minister and central bank governor helped shape a 1.9 trillion-baht ($60 billion) stimulus package that’s meant to curb the economic fallout from the pandemic, and investors want to see those funds put to work.
“We are in a crucial time of transition from lockdown to resumption of business, so the continuation of key policies are very important to help the economy hit by the outbreak,” said Vasin Vanichvoranun, chairman of Kasikorn Asset Management Co. in Bangkok. The sooner the replacements are found “the better,” he said.
Somkid Jatusripitak, who was deputy prime minister in charge of the economy, also resigned alongside Uttama last week, another blow to the government’s management team.
Military Leader
Prayuth is set to make his first Cabinet changes since his victory in last year’s disputed election. A former army chief, he led a military coup in 2014 and ruled as the head of a junta for five years before returning at the head of a multi-party coalition after the vote. Uttama was recently replaced as leader of the largest political party in the coalition.
The political shake-up couldn’t have come at a worse time for the economy. The central bank expects gross domestic product to shrink 8.1% this year, the biggest decline on record and more dire than official forecasts for any other Asian nation. The central bank also is dealing with currency turmoil that’s undermining exports, and is examining new ways of supporting the economy as it runs out of conventional policy space.
After sharp gains since April, the baht has slid steadily this month amid weaker global sentiment. It’s down 2.6% against the dollar since the beginning of July, the worst performer in Asia after Indonesia’s rupiah.
Baht weakness illustrates market worries about the pandemic and the political upheaval, with the uncertainty weighing on financial market, consumer and business sentiment, said Tim Leelahaphan, an economist at Standard Chartered Plc in Bangkok.
The finance minister post is a key one market participants are watching. Prayuth said last week he’s waiting to hear from potential successors he has approached — some of whom are “outsiders” without political backgrounds.
One of the candidates he approached is a well-known banker, who has emerged as the possible front-runner for the post:
Radhika Rao, an economist at DBS Group Holdings Ltd. in Singapore, said the market is looking for “seasoned players” to take over.
“With the broad fiscal stimulus framework to fight the pandemic in place, the incoming finance minister will likely prioritize stabilizing growth through higher government support and demand, as external sectors require global recovery to also get underway as well as international borders to reopen,” she said.
The new finance minister will pick the next central bank governor from a shortlist of candidates. A selection committee received six applications for the position, including from two current deputy governors.
The likely front-runner, according to media reports, is a current member of the bank’s Monetary Policy Committee:
Investors are heartened by the fact that the likely replacements are well-known and qualified, but expect the road ahead to be a difficult one.
“What the newcomers need to deal with are real tough jobs,” said Win Phromphaet, chief investment officer of Principal Asset Management Co. in Bangkok. “The central bank has limited policy space and they will need to handle rising bad debts going forward, while the task of the finance minister, who will need to boost the economy after Covid-19, is also very difficult.”
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
