Political Tensions in Thailand Expected to Disrupt Government Projects and Market Performance

Rising political tensions in Thailand are expected to create obstacles for major government projects, including the proposed entertainment and casino complex. As a result, China Galaxy Securities (CGS) has revised its Stock Exchange of Thailand (SET) index target for 2025, lowering it from 1,530 to 1,380 points, as reported by The Bangkok Post.

Kasem Prunratanamala, head of research at CGS International Securities, noted that a no-confidence debate against Prime Minister Paetongtarn Shinawatra is anticipated to take place in the final week of March, following the filing of a motion by opposition parties.

While CGS maintains that the prime minister is likely to withstand this political challenge, Kasem emphasized that ongoing tensions between the ruling Pheu Thai Party and the Bhumjaithai Party—Thailand’s second-largest coalition partner—could negatively impact investor confidence and market stability.

He further pointed out that these political conflicts might slow down or even derail major government initiatives, including the highly anticipated entertainment complex, which is considered a crucial economic driver.

Beyond domestic political instability, Thailand is also confronting economic pressures from external factors. The possibility of reciprocal tariffs imposed by the U.S. government poses a significant risk to Thai exports, which accounted for 18% of the nation’s total exports in 2024, an increase from 13% in 2019.

The trade surplus between Thailand and the U.S. has expanded considerably, rising from 2.5% of GDP in 2019 to an unprecedented 6.6% in 2024, highlighting the deepening economic relationship between the two nations. However, potential trade restrictions could create additional challenges for Thailand’s economy.

By fLEXI tEAM