During the caretaker period, relief measures were prepared for three vulnerable groups: farmers, vulnerable households and SMEs. The Finance Ministry also put forward options for the incoming government in case the Oil Fuel Fund reached its limits. These included cutting excise tax on oil, considering a windfall tax on refineries, and issuing an emergency decree to allow the Finance Ministry to guarantee loans for the fund.
On the fiscal side, officials also prepared to revise details in the draft 2027 budget bill to accommodate the impact of the Middle East war. There are also plans to table a budget transfer bill for fiscal 2026 to shift unspent allocations into central emergency spending, using an approach similar to the one adopted during the Covid-19 crisis.
Trade war risks continue to cloud outlook
Trade tensions remain another major source of uncertainty. Although earlier US retaliatory tariffs faced legal setbacks, Washington has continued to pursue trade action under Section 301 of US trade law, which gives the Office of the United States Trade Representative authority to impose measures such as higher tariffs or import restrictions.
For Thailand, the risk is significant. The US is the country’s top export destination, and Thailand’s merchandise trade surplus with the United States has become a growing point of sensitivity. The government therefore needs to move quickly in presenting its case and protecting Thai exporters from new penalties.
Economic restructuring remains the hardest task
Beyond the immediate crises, the harder question is whether the new government can tackle Thailand’s long-standing structural problems. Economic growth has remained below potential for years, and the private sector has repeatedly called for production and investment to be reshaped in line with changes in global demand.
Ekniti Nitithanprapas, deputy prime minister and finance minister, has previously outlined the need for a new development model to lift Thailand out of low-growth conditions and break away from an old structure constrained by fiscal limitations. But the previous government had only a short window to act, leaving the new administration with the responsibility to turn those ideas into a concrete plan.
Private sector urges swift action
Kriengkrai Thiennukul, chairman of the Federation of Thai Industries, said the new government must urgently roll out rescue measures before the crisis spreads more widely across industry and the public.
He said the first task is energy management, especially the problem of a two-tier diesel price structure that has left industrial operators carrying high costs. With SMEs already under severe strain, he proposed that the state use the Oil Fuel Fund to subsidise diesel for the industrial sector temporarily for three months.
He also called for the rapid formation of a full cabinet so that the economy could be driven by ministers with full authority rather than by a caretaker administration facing legal and political constraints.
On living costs, he warned that there were already signs of shortages and stockpiling in some areas, meaning the government must closely monitor prices and supply chains.
He added that the government should strengthen trade-defence measures to protect SMEs from an influx of low-priced imports, while also speeding up international trade negotiations, particularly with the United States over Section 301 and related measures.
Another immediate issue is shortages of raw materials and strain in logistics systems. He said the state should help businesses find new sources of imported inputs and improve transport routes to support growing industries, including food packaging producers facing shortages of plastic resin.
“All of these proposals require immediate action. Any delay could allow the economic damage to spread further and undermine the confidence of businesses and investors,” he said.
Business leaders want capable cabinet in place quickly
Poj Aramwattananont, chairman of the Thai Chamber of Commerce, said the prime minister must form a cabinet as quickly as possible so that the government can start work immediately. He said ministers should be chosen on merit, with suitable knowledge and professional ability.
He added that teamwork and unity within the cabinet would be crucial, because Thailand is facing pressure on all fronts, from geopolitical and geo-economic risks to the energy crisis affecting global supply chains.
As for economic restructuring, he said the private sector may have to wait for greater clarity in the government’s policy statement to parliament. Business groups have already submitted proposals, and some may yet be incorporated into future policy.
Economists see stability, but warn of deeper risks
Amonthep Chawla, assistant managing director and head of research at CIMB Thai Bank, said the parliamentary vote was positive for political stability because it created greater clarity, which is an important factor for economic recovery in the period ahead.
He said the new government may project a different image from the previous one, but the broader economic team should still be able to maintain confidence. The urgent priorities now are to appoint a cabinet, accelerate budget disbursement to support the economy, and ensure that the 2027 budget is ready on time for October 1.
He warned that the most immediate issue remains the cost of living, especially oil prices and the rising cost of goods as transport expenses increase.
He also cautioned that populist policies could distort market mechanisms and drive up public debt. If higher prices persist throughout the year, the fiscal burden could eventually weigh on Thailand’s credit standing and even push the current account back into deficit because of more expensive energy and imports, with wider consequences for the baht and capital markets.
Pipat Luengnaruemitchai, chief economist at Kiatnakin Phatra Financial Group, said the real challenge would be balancing urgent relief with long-term restructuring. He said the government may feel compelled to rush into subsidies for living costs and energy prices, but should not lose sight of deeper structural problems such as weak competitiveness, demographic constraints and labour skills that no longer match the demands of the modern economy.
He argued that one of the biggest long-term priorities is expanding renewable energy. Thailand currently gets only about 20% of its energy from renewables, while some other countries have already reached 50-80%, he said. The government should therefore create incentives for Solar Rooftop installations and address technical barriers. Otherwise, Thailand risks falling behind in the global shift towards new technology and new trade rules.
Burin Adulwattana, managing director of Kasikorn Research Center, said the previous government had performed reasonably well over the past four months, especially its economic team, but this round of economic challenges is far tougher because it is not just a domestic problem but part of a global crisis.
He said the government must deal with pressure from the Iran-Israel conflict as well as Donald Trump’s tariff policy under Section 301, which could hurt Thai exports.
“With clearer political stability now in place, this is a good opportunity for the government to work through a full four-year term. If it is genuinely committed to reforming laws and systems that obstruct development, there is a strong chance Thailand’s economy can grow again,” he said.
Oil could surge to $120-$200
Global energy markets remain highly volatile. According to a Citi analysis published on Wednesday, oil prices could rise rapidly if supply disruption worsens, with Brent expected to move into a range of $110-$120 a barrel in the coming days. Market reporting this week also showed Brent already trading above $110 and, at one point, above $119 as conflict intensified.
The note, led by Citi’s global head of commodities Maximilian Layton, set out a new base case with a 50% probability. It assumes oil transport disruption lasting four to six weeks, affecting 11-16 million barrels a day, which would keep Brent climbing until prices reached a level that triggered political or strategic intervention.
That level, Citi said, could force the United States to reconsider military action, or push the International Energy Agency and OECD countries to release strategic reserves, or lead major powers to intensify efforts to reopen the Strait of Hormuz.
In a more severe upside scenario, which Citi assigned a 30% probability, Brent could reach $150 a barrel and even surge to $200 if Iran expands attacks on energy infrastructure across the region or if the Strait of Hormuz remains shut until June. On the downside, which Citi assigned a 20% probability, prices could fall back to $65-$70 by year-end, but only if Washington and Tehran reach a swift agreement and the strait reopens.