Political Unrest Threatens Thailand's Fragile Economic Recovery

Thailand's economy, already reeling from weak consumption, faces a fresh threat: escalating political chaos. With President Donald Trump's tariffs looming and a sputtering recovery effort, the economy's projected growth hangs around a mere 1% this year. New political unrest risks toppling Prime Minister Paetongtarn Shinawatra.

The immediate concern is the passage of a budget for fiscal 2026, due to commence in October, that faces potential delays. Prime Minister Paetongtarn, under pressure for her handling of border tensions with Cambodia, may dissolve parliament. Such a move would derail timely budget approval, further stagnating the economy.

Amid this tumult, Finance Minister Pichai Chunhavajira remains hopeful the budget will proceed without interruption. However, looming tariffs from the U.S. and ongoing protests threaten both tourism and critical trade talks, potentially deepening the financial crisis. Analysts remain cautious, noting the economy's vulnerability to political upheaval.

(With inputs from agencies.)