New Thai PM Promises Stimulus Plan Next Month

Thailand`s economy is likely to have slowed sharply in the fourth quarter.

Thailand's new prime minister, Abhisit Vejjajiva, said on Wednesday his government would unveil a stimulus package next month to revive the country's export- and tourism-driven economy.

Abhisit, who won a parliamentary vote for prime minister on Monday after a court forced out his predecessor, gave no details of the package aimed at restoring confidence in an economy hit by political unrest and a global slowdown. "In January, every sector must have a say on a new economic stimulus plan. We need to restore economic confidence in the country very quickly," Abhisit told corporate executives and labour representatives at his Democrat Party headquarters.

The Oxford-educated economist, who was endorsed by the king as Thailand's 27th prime minister on Wednesday, said protecting jobs would be a top priority of his ruling coalition.

Thailand's economy is likely to have slowed sharply in the fourth quarter due to the long-running political crisis and global economic problems, the Bank of Thailand said this week.

The recent week-long blockade of Bangkok's main airports by anti-government protesters left 300,000 travellers stranded and may have tarnished Thailand's image for years.

Some officials and analysts have said the travel chaos put a million jobs at risk, at a time when the impact of the global slowdown is forcing layoffs in export industries.

Abhisit, 44, told Reuters last week he would cut taxes and raise government spending to offset the impact of slowing exports and political instability.

He is expected to finish choosing his cabinet on Thursday.

Korn Chatikavanij, a former investment banker and leading candidate for finance minister, said on Tuesday the country's political problems could hamper the government's ability to fix the economy.

"The political strife clearly has an impact on the economy. If we can't resolve it, no matter how good the economic policy is, we will not be able to implement it successfully," he told Reuters in an interview.

Analysts doubt the Democrat-led coalition will make much headway in solving the fundamental rifts in Thai society between the Bangkok elite and the countryside, where voters remain loyal to former Prime Minister Thaksin Shinawatra, who was ousted in a 2006 coup and lives in exile.

Democrat leaders have promised to continue the populist policies of the previous pro-Thaksin government, including price support schemes to help farmers cope with falling commodity prices.