Four political cases negatively affecting Thailand’s economy

TUESDAY, JUNE 18, 2024

Confidence in Thailand’s stability takes a deep dive impacting the investment climate with potential far-reaching consequences

Today (June 18) will see developments in four political cases, namely:

The Constitutional Court is set to review the case of 40 senators petitioning to remove Prime Minister Srettha.

The Constitutional Court is scheduled to consider the dissolution of the Move Forward Party.

The prosecutor is summoning former Prime Minister Thaksin to court to face the charge of lese majeste for an interview he gave to a South Korean media outlet in 2015,

The Constitutional Court is to decide on the petition on whether the Organic Act on the acquisition of senators violates the Constitution.

These four political cases are major issues, shaking the confidence of investors, the public, and the nation, leading to the very real risk of an already troubled economy worsening further.

No matter the outcomes of these four cases, they will all impact the investment climate and the country’s economic progress in the near future. Just yesterday (June 17), the Thai stock market showed negative signs with a drop in stocks, falling below 1,300 points—a significant decline not seen in many years.

Meanwhile, recent political uncertainty has led to 17 consecutive days of foreign capital outflows, amounting to more than 32 billion baht, a strong negative signal indicating that the Thai economy is severely affected by internal political factors.

Foreign investors typically avoid investing in countries with political instability and an unfavourable investment environment. It is no surprise that since the beginning of the year, major global investments have overlooked Thailand.

Although Prime Minister Srettha Thavisin has been actively promoting the country’s ideas abroad, neighbouring countries have already taken a significant lead.

When the domestic atmosphere is unfavourable, it extends to the economy, exacerbating already weak consumer spending. Additionally, the market is being encroached upon by Chinese capital, bringing in products at extremely low prices, leaving Thai entrepreneurs and the government at a loss, scrambling to find short-term solutions. This does not even consider the broader structural economic issues in Thailand, which continue to deteriorate.

The country’s competitiveness is lagging behind, infrastructure investment is minimal or insufficient to meet global trends, and foreign investment, especially in modern technology sectors crucial for enhancing national competitiveness, is lacking.

At a time when major global investments are looking to relocate and enter markets in countries without war risks, Thailand is missing out on this golden opportunity, which is regrettable.