^{Photo: Khaama Press}

Political Shake-Up Triggers Uncertainty

Thailand’s political landscape is once again in flux following the removal of Prime Minister Paetongtarn Shinawatra on Friday over an ethics violation linked to a leaked phone call with former Cambodian PM Hun Sen. The conversation reportedly criticized a Thai military commander during a border dispute with Cambodia, sparking her suspension in July and escalating tensions across the government.

Analysts warn that this abrupt removal could lead to short-term chaos, with Nomura noting that upcoming elections are “unlikely to provide a permanent solution.”

Scenarios for Leadership Transition

Political experts suggest multiple outcomes:

• Pheu Thai Party retains power: Paetongtarn’s party could maintain a fragile majority under a placeholder PM, potentially Chaikasem Nitisiri, a veteran politician and former justice minister.
• Coalition government formation: Parties such as the Bhumjaithai Party may attempt to form an unwieldy coalition, but analysts caution that such arrangements rarely succeed in Thailand.

The People’s Party, formerly the Move Forward Party, is set to meet early this week to decide whom to support for the next government. Bhumjaithai’s leader, Anutin Charnvirakul, has been reportedly negotiating, offering to call elections within four months. Analysts point out that Bhumjaithai has roughly 70 fewer seats than Pheu Thai, making a leadership bid less likely.

Even if Nitisiri assumes office, early elections could be called as soon as early 2026, prolonging political uncertainty.

Risk of Another Coup

Observers warn that political instability could trigger another military intervention. Thailand has experienced coups in 2006 (which ousted Paetongtarn’s father, Thaksin Shinawatra) and 2014 (following the removal of Yingluck Shinawatra, Thaksin’s sister).

Joshua Kurlantzick, Southeast Asia expert at the Council on Foreign Relations, said that a collapsed Parliament could pave the way for the military to intervene, especially given fears that progressive parties may gain power through free elections. The Move Forward Party, led by Pita Limjaroenrat, won the most seats in 2023 but was dissolved in 2024 for allegedly violating constitutional law.

A 2024 CSIS report reinforced this view, highlighting that Thailand’s military, monarchy, and traditional elites often perceive electoral democracy as a threat to national stability, frequently using coups to maintain control.

Economic Implications

Thailand’s economic recovery faces mounting pressure amid political turbulence. The SET Index has declined 11.7% year-to-date, reflecting investor concerns.

• Nomura forecasts GDP growth of 1.8% in 2025, down from 2.5% in 2024.
• The World Bank revised Thailand’s growth outlook to 1.8% in 2025 and 1.7% in 2026, citing political uncertainty and weak domestic activity.
• Tariffs from the U.S. continue to weigh on exports, adding to a negative feedback loop between tight financial conditions and slow growth.

Economists expect the Bank of Thailand to cut rates to stimulate growth, but slowing economic momentum and political uncertainty may also prompt Moody’s to downgrade Thailand’s sovereign credit rating, currently at Baa1, with a negative outlook flagged in April.

A Delicate Balancing Act

Thailand now faces a complex intersection of political fragility and economic vulnerability. Analysts warn that while elections may temporarily stabilize the government, the underlying tensions between parties, the military, and the monarchy, combined with weak GDP growth and trade pressures, could keep Thailand in a cycle of uncertainty for years to come.