The Paetongtarn of Thailand Shinawatra, who was dismissed as Prime Minister, leaving the government chamber, after the Constitutional Court decided to withdraw it from its functions in Bangkok, Thailand, August 29, 2025.
Athit PerawongMetha | Reuters
More political and economic uncertainty, and even a coup, can be on the horizon for Thailand after the withdrawal of Prime Minister Paetongtarn Shinawatra on Friday, analysts said at CNBC.
She was dismissed on Friday for a violation of ethics, after her suspension in July after a telephone call disclosed between her and the former Cambodian Prime Minister Hun Sen.
The telephone call revealed that she had criticized a Thai military commander supervising a border dispute with Cambodia while seeming to appease the strong Cambodian man.
The fighting broke out between Thailand and Cambodia at the end of July, although a cease-fire was reached for five days in the conflict.
Chaos in Thailand
Joshua Kurlantzick, principal researcher for Southeast Asia and Southern Asia at the Council of Foreign Relations, told CNBC that there would be “short-term chaos”.
One possibility, he said, is that “Pheu Thai keeps it together and has a tiny majority in parliament which could collapse at any time, with a sort of weak PM like Chaikasem Nitiiri”, he added, referring to the leading party of Paetongtarn, Pheu Thai.
Nitisiri, which is also part of the Pheu Thai party, organized the post of Prime Minister in 2019 and 2023, having been the Minister of Justice in Thailand in 2013.
Another possibility, said Kurlantzick, is an “roughly coalition” formed by another party, like the Bhumjaithai party, counting on the support of the People’s Party – formerly the moving party.
But he added that it “hardly works in any country, and would probably not work in Thailand”.
Early on Monday, Reuters reported that the People’s Party should come together to decide who it will return to form the next government.
The Bhumjaithai party had left the power coalition of Paetongtarn on June 18, after the call with Hun Sen was revealed. The head of Bhumjaithai, Anutin Charnvirakul, was reported by Reuters who had commissioned between the parties, offering promises such as the call of an election within four months.
However, Nomura analysts said that Charnvirakul had a lower chance of taking the Prime Minister’s place than Nitiririri, stressing that the Bhumjaithai party has around 70 less seats in Parliament than Pheu Thai.
Analysts said that if Nitisiri was elected, the status quo of the Government led by PT will remain in place, but they also stressed the risk that the first elections be called in early 2026, because the management coalition orders a relatively low majority in the midst of increasing political uncertainty.
“Nevertheless, the elections, in our opinion, are unlikely to provide a permanent solution and can rather prolong political uncertainty,” added Nomura.
Coup on the horizon?
But this political weakness could increase the possibility of another military coup, warned Kurlantzick. The country experienced state kicks in 2006 and 2014.
The 2006 takeover ousted the father of Paetongtarn, Thaksin Shinawatra, and the 2014 coup in the dismissal by the Yingluck Shinawatra Constitutional Court, Thaksin’s sister.
Kurlantzick told CNBC that if parliament collapses, an early election will be called. The army does not want this, and either, in his opinion.
“In a free early election, going ahead, the progressive party devoted to military reform and the reform of the monarchy, would have a very good chance of winning an absolute majority in Parliament and choosing the Prime Minister. It would be a disaster for the army and the palace,” he said.
The party advances Forward, under chief Pita Limjaroenrat, won the most seats during the election of the House of Representatives in the general elections of 2023, but could not form a government.
The party was dissolved by the Constitutional Court in August 2024, on the grounds that it had violated the Constitution by proposing to modify the law of lift-majeste in Thailand.
Kurlantzick said that “if Parliament falls, the military may think that there is no other option than a coup”, stressing that Thailand has seen two state blows. “It is a very real possibility.”
His point of view is supported by an article in December 2024 by the Center for Strategic and International Studies, a Washington -based reflection group, which said that the military elites, the monarchy and the traditional elites of Thailand consider electoral democracy as a threat to their control.
“They consider themselves guardians of national stability, often considering the largely rural populist electorate as not prepared for informed political participation.”
This added: “Food repeated military coups to dismantle democratic governments whenever they challenge the status quo, allowing elites to protect their power and shape politics to their advantage”.
More economic uncertainty
On the economic level, political instability can be an obstacle to the efforts of Thailand to rekindle its economy, which is struggling with the prices of the Trump administration and one of the least efficient markets in Asia. The defined index fell 11.7% of the year to date.
The main economist of the DBS bank, Radhika Rao, said that Thailand’s growth was “softer”, but that the central bank should always reduce rates to support growth.
Addressing the “Squawk Box Asia” of CNBC on Monday, Rao said that Thailand could feel a slowdown in the second half.
Nameura analysts provide for the gross growth of interior products of 1.8%, saying that the price impact in the second half will worsen the negative feedback loop between close financial conditions and low economic activity.
The 1.8% figure complies with the downgraded expectations of the World Bank in July. The World Bank had greatly reduced Thailand’s growth forecasts for the year from 2025 to 1.8%, compared to 2.9%, and also reduced its projection from 2026 to 1.7%against 2.7%. The economy of Thailand increased by 2.5% in 2024.
Political uncertainty and weakness of growth led Nomura analysts to expect a demotion of the sovereign credit rating during the next quarters by Moody’s.
In April, Moody’s revised the prospects for rating for Thailand to negative stables, signaling an increasing political uncertainty and a small sustained growth. The sovereign credit rating of Moody for Thailand is currently in Baa1.
