Private sector fears deeper economic slump in H2 amid growing political instability
Thai industry leaders voice concern over political instability following leaked PM audio, fearing worsening economic outlook in second half of 2025.
The Federation of Thai Industries (FTI) has expressed growing concern over the political situation, warning that it may further weaken Thailand’s economic outlook in the second half of 2025.
The concern follows a leaked audio clip of Prime Minister Paetongtarn Shinawatra speaking with Hun Sen, former Prime Minister and current President of the Cambodian Senate—an incident that has shaken public confidence and intensified political tensions.
The situation escalated after the Bhumjaithai Party announced its withdrawal from the coalition government, citing the phone conversation as undermining Thailand’s sovereignty and national interests.
Kriengkrai Thiennukul, Chairman of the FTI, told Thansettakij that the incident represents a new domestic risk to the Thai economy, compounding existing pressures such as the Israel–Iran conflict and Thai-Cambodian border tensions.
Adding to the uncertainty is the lack of clarity on the outcome of Thailand–US trade talks, particularly concerning tariffs. If the final terms are unfavourable to Thailand, it could severely impact exports and drag down the economy further in the second half of the year.
“These three issues go beyond what the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) had previously anticipated,” Kriengkrai said.
He added that Bhumjaithai’s departure also reflects long-standing political tension surrounding the control of the Interior Ministry—a powerful portfolio. With Bhumjaithai being one of the largest parties in the coalition, its withdrawal raises questions about the future stability of the government, including how many parties will remain in the coalition and whether it will maintain a parliamentary majority.
“The situation is increasingly concerning. This is a new layer of political uncertainty, and although it is a domestic issue, the private sector will need to closely monitor the government’s stability, how many parties remain in the coalition, and where things go from here,” Kriengkrai concluded.
