Bank Of Thailand Governor To Step Down After Term End

Veerathai Santiprabhob, the governor of Bank of Thailand, has announced that he will not seek a second 5 year term for “family reasons.” His departure, announced yesterday, comes as Thailand’s economy contracted as much as 6% this year, mostly as a result of the impacts of lockdown provisions to protect citizens from the coronavirus, including closing the borders. Thailand’s economy is among the worst in Asia as Covid-19 has destroyed its tourism-heavy sector.

Last week, the head of the BoT’s selection committee said the application period for the next chief will run for 15 business days, from today until June 16. The candidate shortlist will be announced by July 2. The candidates will not be announced until the selection process is finished. If there is only one, or no candidates, the application period will be extended.

With the poor economic outlook resulting from the Covid-19 pandemic, the next BoT governor will be faced with a rather large obstacle.

Thailand’s gross domestic product is expected to shrink 5%-6% in 2020, according to the National Economic and Social Development Council. Yesterday’s estimate is “based on a limited outbreak in the second quarter,” a spokesman told journalists, adding that “the situation is still hard to predict.”

The new projection relies on data showing that the GDP shrank 1.8% in the first quarter from a year ago, the first contraction since 2014. That was lower than the median estimate for a decline of 3.9% in a Bloomberg survey of economists and compares with revised growth of 1.5% in the fourth quarter.

Official data show a 74.6% plunge in tourist arrivals in March compared to last year-data that is very concerning considering Thailand’s reliance on tourism and trade.

“We don’t really see the full impact in this quarter yet. The worst is coming in the second quarter, and most of the population will be affected.”