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From China Securities

There is breaking news in Thai politics.

According to Xinhua News Agency, the lower house of the Thai parliament voted on the 16th to elect Pheu Thai Party leader Petunthan Shinawatra as the new prime minister of Thailand. Petunthan is 37 years old and is the youngest daughter of former Thai Prime Minister Thaksin Shinawatra. She thus became the youngest prime minister and the second female prime minister in Thai history.

After the announcement, the Thai baht continued to fall against the US dollar, while the Thai benchmark stock index, the SET index, continued to rise, up 0.62% to 1297.95 points. Some analysts pointed out that the frequent power transfers and struggles in Thai politics will inevitably affect Thailand's social and economic stability, causing foreign investors to wait and see.

Just two days ago (August 14), the Constitutional Court of Thailand ruled that Prime Minister Setiawan was unconstitutional and removed him from his post as prime minister effective immediately. This also caused a new wave of turmoil in Thai politics. Some US media commented that "this shocking ruling will plunge Thai politics into further uncertainty."

New Prime Minister of Thailand

On August 16, according to Xinhua News Agency, the lower house of the Thai parliament voted on the 16th to elect Pheu Thai Party leader Petunthan Shinawatra as the new prime minister of Thailand.

Petunthan is 37 years old and is the youngest daughter of former Thai Prime Minister Thaksin. She has become the youngest prime minister in Thai history, the second female prime minister (the first was her aunt Yingluck), and the third prime minister from the Thaksin family (the first two were Thaksin and Yingluck).

According to the information, Petongtan was born on August 21, 1986 and graduated from Chulalongkorn University in Thailand in 2008 with a bachelor's degree in political science, sociology and anthropology. After that, she went to the University of Surrey in the UK to obtain a master's degree in international hotel management.

Thaksin's family owns a lot of hotel properties, and Petunthan seemed to be preparing to take over. Sure enough, after Thaksin's sister Yingluck went into exile, Petunthan began to take over the family business.

After graduating and returning to China, Petuntan worked at SC Asset Corporation, a real estate development company, and is the company's largest shareholder. In 2018, she married pilot Pitaka, and the two have a daughter and a son.

In fact, Petthorntan has not been involved in politics for a long time. She joined the Pheu Thai Party in 2019. In 2021, Petthorntan entered politics and served as a political adviser to the Pheu Thai Party. On October 27, 2023, Petthorntan was elected as the new leader of the Pheu Thai Party.

A new wave of trouble

Just two days ago (August 14), the Constitutional Court of Thailand ruled that Prime Minister Setiawan was unconstitutional and dismissed him from his post as prime minister effective immediately. This also caused a new wave of turmoil in Thai politics.

Some US media commented that "this shocking ruling will plunge Thai politics into further uncertainty."

Xinhua News Agency previously introduced that Seta was born in February 1962. He studied abroad in his early years and went into business after returning to Thailand. He is a successful real estate developer in Thailand. He announced his joining of the Pheu Thai Party at the end of 2022, became one of the prime ministerial candidates of the Pheu Thai Party in 2023, and was officially appointed as the 30th Prime Minister of Thailand in August 2023.

In April this year, Setha reshuffled the cabinet and appointed Phichit as the Minister of the Prime Minister's Office. Phichit was a lawyer who represented Thaksin in a land acquisition case in 2008. He was accused of trying to bribe the judge during the process and was later sentenced to six months in prison for contempt of court and his lawyer's license was revoked.

The appointment was opposed by 40 members of the Senate, who jointly submitted a petition to the Constitutional Court, demanding the termination of Setha and Phichit's positions. On May 21, Phichit resigned as Minister of the Prime Minister's Office. On August 14, the Constitutional Court ruled that Setha was unconstitutional and dismissed him immediately.

On the afternoon of August 15, the Pheu Thai Party and the ruling coalition held a press conference and formally nominated Petunthan as the candidate for prime minister.

Crisis in Thailand

Recently, Thailand's political arena has been in turmoil, and the two major parties in the lower house of parliament, the Far East Party and the Pheu Thai Party, have both been hit. In May this year, the Thai prosecutors decided to prosecute Thaksin again. In June, the Thai Criminal Court said that it accepted the prosecution of Thaksin by the Attorney General's Office on the same day. The court subsequently approved Thaksin's application for bail and planned to hear the case again on August 19.

On the other hand, the Far East Party has also been in turmoil. On August 7, the Constitutional Court ruled that the Far East Party's promise to amend Article 112 of the Criminal Code during last year's election was unconstitutional, and announced the dissolution of the Far East Party. The relevant members of the party's executive committee were not allowed to engage in politics for 10 years. On the 9th, the Far East Party announced the establishment of a new political party, the People's Party, and 143 former Far East Party members of the lower house of parliament joined the People's Party.

Some analysts pointed out that frequent power transfers and party struggles will inevitably affect Thailand's social and economic stability and make foreign investors wait and see. Data shows that in the first quarter of this year, Thailand's GDP grew by 1.5% year-on-year, the lowest growth rate in the ASEAN region.

Thailand's Deputy Prime Minister and Finance Minister Pichai said in July that Thailand's economy has been in a long-term recession and economic growth is deteriorating due to structural problems.

In its latest report in July, the World Bank lowered its forecast for Thailand's economic growth in 2024 to 2.4%, from the previous forecast of 2.8%. The adjustment was mainly due to the performance of exports and public investment at the beginning of the year being lower than expected.

The Thai baht depreciated by 7% in the first half of 2024, making it the largest depreciator in Asia, second only to the Japanese yen. Analysts believe that the main reasons for the depreciation of the Thai baht include the outflow of foreign capital due to factors such as US monetary policy and domestic political uncertainty in Thailand.

TTB Analytics estimates that the Thai baht may experience greater volatility at the end of 2024, with fluctuations ranging from 35 to 36 baht per dollar. This is after the Thai economy faces structural problems, with domestic fundamentals more fragile than in the past and the balance of payments not as strong as in the past.

Editor: Peng Bo

Proofreading: Yang Shuxin

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