Thai Paetongtan Sinawatra was fired as prime minister after the Constitutional Court ruled that she would retire in Bangkok, Thailand on August 29, 2025.
Athit Perawongmetha |Reuters
Analysts told CNBC that more political and economic uncertainty, and even a coup, could be on the horizon in Thailand after Prime Minister Paetontan Sinawatra removed on Friday.
She was fired on Friday for breach of ethics after being suspended in July after a leaked call emerged between Cambodian Prime Minister Hun Sen.
The phone revealed that she criticized the Thai military commander who oversees the border dispute with Cambodia while she appears to be trying to appease Cambodia’s strong.
In late July, fighting exploded between Thailand and Cambodia, but a ceasefire reached five days after the conflict.
Chaos in Thailand
Joshua Krulanzick, a senior fellow in Southeast Asia and South Asia at the Council of Foreign Relations, told CNBC there was “confusion in the short term.”
According to him, one possibility is “Pheu Thai has some kind of weak placeholder PM, like Chaikasem nitisiri, in Congress that can keep it together and collapse at any time,” he added.
Nitisiri, who is also a member of the Pheu Thai Party, ran for prime minister in 2019 and 2023, and was Thai Minister of Justice in 2013.
Another possibility, Kurrantzick said, is the “unsiftly coalition” formed by other parties such as the Bhumjaithai Party, and hopes for support from the People’s Party.
However, he added that this “will hardly work in any country, and probably won’t work in Thailand.”
Earlier on Monday, Reuters reported that the People’s Party would meet to decide who will return to form the next government.
The Bhumjaithai Party left the governing coalition of Paetongtarn on June 18 after the call with Hun Sen was revealed. Bhumjaithai leader Anutin Charnvirakul reportedly concluded between parties by offering pledges from Reuters, including calling for elections within four months.
However, Nomura analysts said Chaan Birakul is less likely to win the prime minister’s spot than Nichisiriri, pointing out that the Bumjaytay Party has about 70 seats than Pyu Thai.
Analysts said the status quo of the PT-led government would be maintained if Nitisiri was elected, but they also highlighted the risk that early elections would be called in early 2026.
“Nevertheless, in our view, elections are unlikely to offer a permanent solution and instead may further extend political uncertainty,” Nomura added.
A coup on the horizon?
But that political weakness could increase the possibility of another military coup, Kurrantzick warned. The country experienced a coup in 2006 and 2014.
The 2006 acquisition expelled Paetongaghn’s father, Thaksin Sinawatra, and the 2014 coup followed the removal of the constitutional court of Thaksin’s sister, Ingluk Sinawatra.
Kurrantzick told CNBC that if Congress collapses, the SNAP election will be called. The army does not want that, and in his view neither does the king.
“In a free snap election, a progressive party dedicated to military reform and reform of the monarchy will likely win an absolute majority in Parliament and choose a prime minister. That would be a disaster for the military and palace,” he said.
The Progressive Party under leader Pita Rimjaroenratt won the most seats in the House election in the 2023 general election, but it failed to form a government.
The party was dissolved by the Constitutional Court in August 2024 and was dissolved by the Constitutional Court on the grounds that it violated the constitution by proposing to amend Thailand’s Race Majete Law.
“If Congress falls, the military may feel that there is no other option than a coup,” Kurrantzick said.
His views are supported by a December 2024 paper by the Center for Strategic International Studies, a Washington-based think tank.
“They view themselves as guardians of national stability, and often view largely rural populist voters as unprepared for informed political participation.”
It added, “It encouraged repeated military coups to dismantle the Democratic government every time they challenged the status quo, allowing the elite to protect their power and protect politics for their interests.”
More economic uncertainty
Economically, political instability could spark Thailand’s efforts to revive the Trump administration and the economy tackling tariffs from one of Asia’s worst-performing markets. The set index has dropped by 11.7% per year to date.
Radhika Rao, senior economist at DBS Bank, said that Thailand’s growth is on the “softer side,” but the central bank is expected to lower fees to support growth.
Rao spoke with CNBC’s “Squawk Box Asia” on Monday, saying Thailand could experience a slowdown later this year.
Nomura predicts GDP growth at 1.8%, saying the impact on tariffs in the second half will exacerbate the negative feedback loop between close financial position and weak economic activity in the economy.
The 1.8% figure is in line with expectations for a downgrade to the World Bank in July. The World Bank reduced Thailand’s full-year growth forecast for 2025 from 2.9% to 1.8%, and reduced its 2026 forecast from 2.7% to 1.7%. Thailand’s economy rose 2.5% in 2024.
Political uncertainty and weak growth have led Nomura analysts to look forward to Moody’s downgrades sovereign credit ratings for the upcoming quarter.
In April, Moody revised Thailand’s rating outlook negatively from a stable one, flagging its growing political uncertainty and persistent decline in growth. Moody’s Thailand’s sovereignty credit rating is currently in BAA1.
