(Bloomberg) -- Thai Prime Minister Srettha Thavisin sought to assuage fears about growing differences between fiscal and monetary policymakers, saying he and central bank Governor Sethaput Suthiwartnarueput met Monday to discuss matters related to the economy.
“It was a matter of two adults talking and talking well,” he told reporters after meeting with the Bank of Thailand chief. “There will be a meeting like this on a monthly basis,” Srettha had said earlier in a post on X, formerly known as Twitter.
The remarks come amid speculation about a policy rift between the two after Srettha unveiled his economic stimulus plan at a time Sethaput was advocating for coordinated fiscal and monetary belt-tightening. Local media including Post Today and Krungthep Turakij had earlier reported that the government was displeased with the BOT’s decision last week to raise interest rates a decade-high.
“We are both adults, so we can’t agree with each other on everything,” said Srettha, who repeatedly said that there was no conflict. “We need to listen to each other and continue the talks.”
Deputy Finance Minister Julapun Amornvivat separately said early Monday the government and the BOT are working together well and that the two sides don’t have any disagreements, as he specifically referred to Srettha’s debt-moratorium plan.
The BOT has been vocal about the need for policy normalization based on its assessment that the economy has momentum amid a rebound in tourism. While Sethaput has opined that the economy needs policies to attract investment and not measures to boost consumption, the rate-setting panel he heads has signaled it’s ready to pause rate hikes, and that future actions will depend on factors inlcuding upside risks from the government’s economic policies.
Srettha, who also doubles as the finance minister, last month dismissed rumors that he’s planning to push out Sethaput and said he’s in touch with the BOT chief about aligning policies. The tycoon-turned-premier, in his interview with Bloomberg Television last month, said his government targets to speed up economic growth to 5% annually starting next year.
“We don’t have any conflicts with the central bank,” said Paopoom Rojanasakul, secretary to the finance minister, adding to the government chorus.
Srettha, also on Monday, said that he will push ahead with a 560-billion baht ($15.2 billion) handout to the majority of Thai citizens early next year as well as increase the daily minimum wage to 400 baht once the economy improves.
The leader has earlier vowed fresh energy subsidies, three-year debt suspensions for farmers and small businesses and visa waivers for Chinese tourists.
The yield on benchmark 10-year bonds have soared about 50 basis points to near an 11-month high since Srettha was elected as prime minister in August, reflecting market concerns on the government’s rising financing needs. The local currency has weakened almost 5% in the past month, making it the worst-performer among 12 Asian currencies tracked by Bloomberg.
--With assistance from Janine Phakdeetham.
(Uodates with Prime Minister’s latest comments in the lead.)
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