Coalition split a threat to economy

Pundits call for continuity of policies

- NAREERAT WIRIYAPONG SUCHIT LEESA-NGUANSUK WICHIT CHANTANUSORNSIRI

As political instability unfurls between the ruling Pheu Thai Party and its coalition partner Bhumjaithai Party, it is likely to further dampen investor sentiment, compounding concerns amid the looming threat of a 36% US tariff on Thai exports.

FRAGILE ECONOMY

Poonyawat Sreesing, senior economist at Siam Commercial Bank's Economic Intelligence Center (SCB EIC), said the Thai economy has been pressured by political uncertainty for some time, but cannot withstand the severe shock from a House dissolution.

"I think we have to wait for a clearer picture regarding the cabinet reshuffle," he told the Bangkok Post, expressing hope the politicians can reach a compromise.

"I believe nobody wants to see a significant change [in politics] when the economy is so fragile and no buffer is available for a severe shock, unlike during the pandemic or a new election period."

With the cabinet likely to change, the government's major policies should be maintained to support the subdued economy, said Mr Poonyawat.

Yunyong Thaicharoen, chief economist and sustainability officer at SCB EIC, said a cabinet reshuffle should be done swiftly to minimise negative consequences on the economy.

"Political instability undermines confidence. In any political change, we hope it proceeds quickly and smoothly," he said.