Leading Thai economists are warning that the country’s current political instability, which could lead to a House dissolution, may disrupt government spending and economic stimulus plans.
They believe that a new, potentially short-lived government would be unable to effectively implement key policies, leading to a period of “policy paralysis”.
A hurried dissolution before the economy has fully recovered could damage investor confidence and put pressure on the capital market.
However, some economists believe that any negative impact would be limited, as the 2026 budget has already been approved by parliament.
According to Amornthep Chawla, executive vice president and head of Research at CIMB Thai Bank, the political situation is becoming clearer, but the focus is now on the formation of a new government and the selection of a prime minister.
For the private sector and investors, he says, clarity and stability are paramount. A quick appointment of a new government would help reduce uncertainty and establish a clear economic framework.
Amornthep notes that the next government faces a “very difficult” task, with recent economic data showing a slowdown in consumption, investment, tourism, and foreign trade.
He stressed that the private sector needs concrete policies that can quickly build confidence and deliver economic results.
A delay in forming the government could affect the 2026 budget and potentially lead to a credit rating downgrade for Thailand.
“The challenge is immense because we have no time to wait. The new government will have no time for a honeymoon period; they will have to hit the ground running,” Amornthep said. “Otherwise, the economy risks stumbling further, and we will fall behind other countries.”