New Central Bank Governor brings spark of optimism for Thailand, now hit by drought

BANGKOK – ANZ Bank says the appointment of Veerathai Santiprabhob as Governor of the Bank of Thailand brings a spark of optimism at a time when drought is adding to Thailand’s economic woes. The new Governor will take office in October.

“Given his reputation for progressive thinking, we expect him to maintain a central focus on the inflation target and are hopeful that he can dexterously deal with the mechanics of monetary policy and broken transmission mechanisms to arrest the current slide in the Thailand economy,” ANZ says.
But, ANZ says, not even Veerathai has the power to make it rain!

“Although the worst dry spell in a decade may be ending with the beginning of seasonal rains, at least seven provinces are still experiencing water shortages.
“Thus, the country may remain mired in domestic and external cross-currents, such as lacklustre agricultural production and manufacturing activity, as well as subdued export demand despite a weaker baht.  
“Although the immediate impact on growth and inflation could be marginal at this juncture, since agriculture accounts for less than 10% of GDP, the longer-term effects of the drought could be multiplied if the industrial sector becomes affected by subsequent policies, such as involuntary water rationing.
“The junta clearly faces an uphill task of steering the economy through these difficult times.” www.live.anz.com (ATI).