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Reuters
22-07-2025
- Business
- Reuters
Thailand's next central bank chief champions rate cuts to revive growth
BANGKOK, July 22 (Reuters) - Vitai Ratanakorn, the incoming governor of the Bank of Thailand, by his own admission, will start his new job in October at a difficult time. Growth in Southeast Asia's second-largest economy has stalled, tense negotiations with the United States over trade tariffs continue, industrial sentiment is tepid and critical sectors, including tourism and manufacturing, aren't firing. "We must accept that the Thai economy is not doing so well," Vitai, who has been approved by the cabinet as the next central bank chief but awaits royal endorsement, told reporters last week. "And what is worrying is the sluggishness that may be prolonged." The 54-year-old, who currently serves as president and chief executive of the Government Savings Bank, Thailand's largest state-owned lender, has a prescription: more rate cuts. The central bank late last month left the key interest rate unchanged, underlining the need to save some policy ammunition, after cuts in October, February and April. Those reductions brought the one-day repurchase rate (THCBIR=ECI), opens new tab to 1.75%, the lowest in more than two years. "Proactive easing is important," Vitai told Thai financial daily Krungthep Turakij on June 20, when he was locked in the race for the top job with central bank insider Roong Mallikamas. "It's not just another one or two cuts. We may have to reduce them for a long time and more deeply. So, from 1.75%, if you ask me personally, I think it can go down much further." Thailand's ruling Pheu Thai party, which took power in 2023, has been at loggerheads with current Bank of Thailand chief Sethaput Suthiwartnarueput for not cutting rates enough to support a sluggish economy. In May last year, before she became prime minister, Pheu Thai leader Paetongtarn Shinawatra said the central bank's independence was an "obstacle" in resolving economic problems, underlining the scale of the friction. Vitai's stance will likely tone down some of that conflict, but it has also raised questions about his own ability to lead the central bank without succumbing to pressure from the ruling party - an issue he has publicly addressed. "I am confident that I can make decisions independently, based on principles and prioritising the nation's interests, free from the influence of any groups," Vitai wrote on his Facebook page on July 8. Vitai studied economics and law at Thailand's Chulalongkorn and Thammasat universities, and finance at Drexel University in the United States, and entered the Thai private sector, where he worked at Charoen Pokphand Group and budget carrier Nok Air. A former colleague, who worked alongside Vitai at a private firm, described him as a team player who preferred to work with consensus. "He is more of a practicalist than a theorist, focusing on getting the job done," he said, asking not to be named because he is not authorised to speak to media. In 2018, Vitai was appointed the Secretary-General of the Government Pension Fund, which manages assets worth about 1.4 trillion baht ($43 billion), and two years later became the head of the Government Savings Bank. Thirachai Phuvanatnaranubala, a former Thai finance minister, said Vitai's long experience as a government banker should help him manage relationships with senior finance ministry leadership. "However, his lack of work experience and zero exposure to high level macro public policy is a cause for concern," Thirachai told Reuters.
Reuters
22-07-2025
- Business
- Reuters
Thai cabinet approves Vitai Ratanakorn as next central bank chief, official says
BANGKOK, July 22 (Reuters) - Thailand's cabinet on Tuesday gave its approval for Vitai Ratanakorn to be the next governor of the Bank of Thailand, a government official said. The appointment of Vitai, 54, the president and CEO of the Government Savings Bank, would be subject to royal approval before he starts a five-year term on October 1. The cabinet approval was announced by government spokesperson Jirayu Huangsap. Vitai will succeed Sethaput Suthiwartnarueput, who could not seek a second term as he has reached retirement age. The new governor faces a tough task of supporting a struggling economy facing tepid consumption, high household debt and steep U.S. tariffs, with limited monetary policy room. Vitai was picked over central bank veteran and deputy governor Roong Mallikamas. Some analysts expect Vitai's appointment to improve working between the central bank and the Pheu Thai party-led government, which has previously clashed with Sethaput over interest rates and monetary policy settings.
CNA
09-07-2025
- Business
- CNA
Thai central bank sees economy slowing in second half as tariffs hit exports
BANGKOK :Thailand's economy is expected to slow in the second half of the year and faces heightened uncertainty, the central bank said on Wednesday, as consumer confidence hit the lowest level in more than two years. Thai exports, a key driver of the economy, were expected to contract 4 per cent on a yearly basis in the second half of the year as a result of the tariffs imposed by the United States, the Bank of Thailand said. The United States was Thailand's largest export market last year, accounting for 18.3 per cent of total shipments and reaching a value of $55 billion. Washington says its trade deficit with Thailand hit $45.6 billion in 2024. Southeast Asia's second-largest economy faces tariffs of 36 per cent from Washington if a deal cannot be reached before August 1. Uncertainty around tariffs and government stability pushed consumer confidence to its lowest in 28 months, falling for a fifth consecutive month, a university survey showed on Wednesday. The economy is growing below its potential, and is forecast to expand 2.3 per cent this year and 1.7 per cent in 2026, deputy central bank governor Piti Disyatat said, adding those forecasts had already factored in the headwinds. In the first five months of 2025, exports rose 14.9 per cent from a year earlier, commerce ministry data showed, as companies rushed to deliver their products before a 90-day tariff pause came to an end. That pause has now been extended to August. The central bank forecast exports to rise 4 per cent this year but drop 2 per cent next year. A shippers' group on Wednesday cut its export growth forecast from a range of 0 per cent to 1 per cent from 1 per cent to 3 per cent seen earlier. Thai economic growth and financial conditions were held back by several factors and monetary policy alone had limited efficacy when addressing those issues, minutes from the Bank of Thailand's June 25 monetary policy meeting showed on Wednesday. At the meeting, the BOT's monetary policy committee voted 6 to 1 to keep the one-day repurchase rate unchanged at 1.75 per cent, after back-to-back cuts in February and April. "Targeted measures in conjunction with business adaptation were deemed necessary," it said. At the review, the stronger-than-expected start to the year saw the BOT lift its central-case economic growth forecast to 2.3 per cent for 2025, almost matching last year's 2.5 per cent and more optimistic than some market analysts. The next rate review is on August 13.
CNA
09-07-2025
- Business
- CNA
Thai economy to slow in second half of 2025, central bank says
BANGKOK :Thailand's economy is expected to slow in the second half of the year and faces heightened uncertainty, the central bank said at a briefing on Wednesday. Thai exports, a key driver of the economy, were expected to contract 4 per cent on a yearly basis in the second half of the year as a result of the tariffs imposed by the United States, the Bank of Thailand said. The United States was Thailand's largest export market last year, accounting for 18.3 per cent of total shipments and reaching a value of $55 billion. Washington says its trade deficit with Thailand hit $45.6 billion in 2024. Southeast Asia's second-largest economy faces tariffs of 36 per cent from Washington if a deal cannot be reached before August 1. The economy is growing below its potential, and is forecast to expand 2.3 per cent this year and 1.7 per cent in 2026, Deputy Governor Piti Disyatat said, adding that those forecasts had already factored in the headwinds. In the first five months of 2025, exports rose 14.9 per cent from a year earlier, commerce ministry data showed, as companies rushed to deliver their products before a 90-day tariff pause came to an end. That pause has now been extended to August. The central bank forecast exports to rise 4 per cent this year but drop 2 per cent next year. Thai economic growth and financial conditions were held back by several factors and monetary policy alone had limited efficacy when addressing those issues, minutes from the Bank of Thailand's June 25 monetary policy meeting showed on Wednesday. At the meeting, the BOT's monetary policy committee voted 6 to 1 to keep the one-day repurchase rate unchanged at 1.75 per cent, after back-to-back cuts in February and April. "Targeted measures in conjunction with business adaptation were deemed necessary," it said. At the review, the stronger-than-expected start to the year saw the BOT lift its central-case economic growth forecast to 2.3 per cent for 2025, almost matching last year's 2.5 per cent and more optimistic than some market analysts. The next rate review is on August 13.
Bloomberg
09-07-2025
- Business
- Bloomberg
Thai Central Bank Governor Candidate Defends His Independence
One of two finalists to run the Bank of Thailand defended himself against accusations by a former governor that he wouldn't be able to make independent decisions because of his ties to a state-run lender. Vitai Ratanakorn said in a Facebook post on Tuesday that he has served as the chief executive officer for several organizations, other than his current post as president of the Government Savings Bank.
