Populist polices create a conundrum for Thailand's government
Thailand’s new finance minister, Mr Phuvanatnaranubala, confirmed he will push ahead with the populist policies his party advocated during last June’s campaign, such as a 40 per cent raise in minimum wage. The government advocates that such measures will build domestic demand and ease the country’s overwhelming dependence on exports, an otherwise precarious position in the event of a global downturn.
Yet by stoking an already high inflation they could also prove self defeating, in addition to promising to be rather costly (an estimated 20 per cent of GDP). A firm believer in astrology, Mr Phuvanatnaranuvala may have to ask to the stars to guide him through this conundrum.