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Leading Thai economists are warning that the country\u2019s current political instability, which could lead to a House dissolution, may disrupt government spending and economic stimulus plans.<\/p>\n
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They believe that a new, potentially short-lived government would be unable to effectively implement key policies, leading to a period of “policy paralysis”.<\/p>\n
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A hurried dissolution before the economy has fully recovered could damage investor confidence and put pressure on the capital market.<\/p>\n
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However, some economists believe that any negative impact would be limited, as the 2026 budget has already been approved by parliament.<\/p>\n
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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.<\/p>\n
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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.<\/p>\n
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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.<\/p>\n
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He stressed that the private sector needs concrete policies that can quickly build confidence and deliver economic results.<\/p>\n
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A delay in forming the government could affect the 2026 budget and potentially lead to a credit rating downgrade for Thailand.<\/p>\n
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<\/p>\n
“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.”<\/p>\n
<\/p>\n
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