Gold bars to be exempt from tariffs, White House clarifies
Investing.com -- The Thai government coalition now holds a slim majority of 261 members of parliament following the exit of the Bhumjaithai Party, the second-largest party with 69 MPs. The minimum required for a majority is 249 MPs.
The departure comes after a leaked audio conversation between the Thai Prime Minister and former Cambodian leader Hun Sen, in which the Thai PM was heard criticizing the Thai Army.
Political uncertainty in Thailand has intensified significantly, with opposition parties calling for the Prime Minister’s resignation and dissolution of the House. This political crisis emerges at a particularly vulnerable time for Thailand’s economy, as domestic economic drivers remain fragile and external pressures mount, including potential 36% tariffs from the United States.
The weakened government is expected to create a "wait and see" market environment as various scenarios could unfold. A house dissolution and subsequent re-election would benefit few political entities except the People’s Party, according to Macquarie. Such a dissolution risks delaying the fiscal year 2026 budget, which would negatively impact the economy.
The current administration may attempt to continue governing with either Paetongtarn or Chaikasem Nitisiri, the Pheuthai PM candidate, at the helm. Despite efforts to pass the FY26 budget, policy execution is likely to be limited as the coalition remains fragile amid high uncertainty.
Smaller parties within the remaining coalition are positioned to gain greater leverage in government decisions, potentially necessitating increased backroom negotiations to maintain the coalition’s stability. The political risk, while a recurring feature in Thailand, comes at a particularly challenging economic juncture.
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