PM’s adviser accuses Bank of Thailand governor of not being in touch with reality
An adviser to the PM took the Bank of Thailand (BOT) governor to task for doing too little to contribute to the country’s economy during his three years in office.
Pichai Naripthaphan, who is also a leading Pheu Thai Party member, said on Monday that BOT chief Sethaput Suthiwartnarueput had also failed to accurately predict the country’s growth.
The Fiscal Policy Office last week reported the 2023 growth at 1.8%, far lower than the BOT’s projection of 2.4-2.5%.
He said the BOT has been inaccurately projecting the economic growth of Thailand over the past few years, yet it has done nothing to help push the growth.
He said this year, the BOT’s economic projection will be wrong again if it fails to do anything to support the economy.
BOT’s defence
After the government spokesman announced the Fiscal Policy Office’s growth figures, Sethaput told Reuters news agency that Thailand was not suffering an economic crisis, but its growth was just lower than projected.
“But I would like to ask the BOT governor if it is a crisis to see the country grow less than projected for 10 consecutive years?” Pichai said.
He also noted that when Sethaput took the post of BOT governor in 2020, Thailand had not yet recovered from negative growth that year.
He explained that in 2020, economic growth came in at minus 6.1%, and the figure only went into positive territory in 2021, 2022 and 2023, growing 1.6%, 2.6% and 1.8%, respectively.
“Combining the growth over the past three years resulted in 6%, far lower than the negative figure in 2020,” Pichai said.
“This means the Thai economy has gone nowhere in the past four years. If I were the BOT governor, I would be worried and disappointed, as most other countries saw much higher growth in 2021.”
He pointed out that even Vietnam had enjoyed more than 20% growth in 2020.
“If the BOT governor does not think this is problematic, then he should change his way of thinking,” Pichai added.
Far from the truth
A TV show called “This Morning Stories” recently gathered opinions from 240,000 respondents and 93% of them said the country’s economy was in trouble.
“If the governor does not think this is true, then he must explain to these 93% of people why that is so,” he said.
Pichai added that Sethaput told Reuters that the economy needed restructuring to enable growth. However, he asked Sethaput what he had done to support the restructuring of the economy.
He said the central bank should have supported the country by getting commercial banks to lower their lending rates to narrow the spread between deposit and borrowing rates.
Pichai said that the BOT may not be able to lower its policy rate from 2.5%, but it could force commercial banks to lower their rates immediately.
The PM’s adviser also said liquidity issues in the financial and banking systems could bring the economy further down this year.
“What measures has the BOT taken to cope with this liquidity crunch?” Pichai asked.
He also called on Sethaput to see if the central bank’s decisions on financial policies, interest and exchange rates had been made with the end goal of boosting economic growth in mind.
Fat wallet?
Pichai said the BOT governor, who earned more than 20 million baht a year, might be out of touch with the ordinary citizen, whose income has not risen, but whose expenses have been rising.
Hence, he said, the governor should spend the last year of his tenure figuring out how these people’s lives can be improved.
“The BOT governor may not want his work records to show that his policies during his four years in office caused the Thai economy to stand still. Wouldn’t that be shameful?” Pichai said.
