BANGKOK Thailand will name former corporate energy executive and central bank board member Pichai Chunhavajira as its new finance minister, taking over the role from Prime Minister Srettha Thavisin, two government sources told Reuters on Thursday.

Pichai, 75, who has been Srettha's adviser, on Thursday resigned as both chair of the board of Bangchak Corporation, a post he held since 2012, and the board of the Stock Exchange of Thailand.

The government sources declined to be identified because they were not authorised to speak to media on the issue.

A government spokesperson declined to comment and calls to Pichai on Thursday went unanswered.

If confirmed as finance minister, Pichai would face a tough task of reviving Southeast Asia's second-largest economy, which lags regional peers, as it faces high household debt and borrowing costs as well as China's slowdown.

While Pichai should have the experience of capital markets, "being the government's CFO as well as the economic czar is a major challenge," said Kobsidthi Silpachai, head of capital markets research of Kasikornbank, adding his appointment could help coordination with the central bank.

Thailand's economy unexpectedly shrank in the final quarter of 2023 from the third, while last year's growth was 1.9%, below the 2.5% growth in 2022.

The state planning agency in February lowered its 2024 economic growth outlook to between 2.2% and 3.2% from a previous forecast of 2.7% to 3.7%.

Policy tensions

Pichai would be tasked with overseeing key government policies, including Srettha's flagship 500 billion baht handout scheme, which would transfer 10,000 baht to each of 50 million Thais to spend in their communities.

The stimulus has been delayed to late 2024 due to a lack of funding and concerns about the impact on public debt, with economists and some former central bank governors criticising it as fiscally irresponsible.

The government has rejected that and is forging ahead with the scheme, despite the central bank recommending it be targeted only towards vulnerable groups.

Srettha, a real estate mogul and political newcomer, has held the post of finance minister since taking office last year.

He has been at loggerheads with the Bank of Thailand (BOT) over the direction of monetary policy, repeatedly asking it to cut rates to help an economy he describes as at a "critical" stage.

The BOT has resisted that pressure and left its key interest rate unchanged at 2.50%, the highest in more than a decade, for a third straight meeting in April. Its next rate review is on June 12.

Pichai holds a master's degree in business administration from Indiana University of Pennsylvania and was a BOT board member from 2014 to 2017. He served as director at PTT Exploration and Production from 2001 to 2013.

Natapon Khamthakrue, an analyst at Yuanta Securities, said Pichai's seniority and political and economic knowledge should help make his work with the central bank "better and easier".

  - Reuters