Court ruling mars confidence

Both domestic and foreign investors are becoming increasingly hesitant, with many delaying or reconsidering investment decisions.

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This caution is especially pronounced in sectors reliant on government spending, such as construction.

"The private sector is likely to adopt a wait-and-see approach, particularly for projects tied to public budgets," he said.

However, if the government can maintain political stability and ensure continuity in policy direction, the erosion of investor confidence could be contained, said Mr Amonthep, though he warned of tensions between the coalition parties.

"Should coalition parties face pressure to reassess their alignment or withdraw support, the situation could escalate towards a House dissolution," he said.

Mr Amonthep said disbursement of the current fiscal budget and planned stimulus budget is unlikely to be disrupted or delayed, as the government retains full authority and is not operating in a caretaker capacity.

Still, a political collapse and House dissolution could delay the approval process for the fiscal 2026 budget, posing a risk to the economy from the fourth quarter of this year through the second quarter of next year, he said.

TRADE TALK UNAFFECTED

Sompop Manarungsan, president of Panyapiwat Institute of Management and an economic analyst, said he believes the suspension order is unlikely to have a significant impact on the Thai delegation to the US for tariff negotiations.

He said the US is unlikely to focus on individual figures, but rather the entire Thai political system and whether it is mature and established.