Thailand faces another abrupt political turn as the Constitutional Court dismisses PM Paetongtarn Shinawatra

Executive Summary

• Prime Minister Paetongtarn Shinawatra dismissed: The Constitutional Court removed her in a 6–3 ruling over ethical breaches tied to a leaked call with Cambodia’s Hun Sen, triggering immediate political uncertainty and a caretaker administration under Deputy PM Phumtham Wechayachai.

• Coalition manoeuvring accelerates: Pheu Thai’s weakened position after Bhumjaithai’s withdrawal has intensified negotiations. Reports indicate Bhumjaithai is offering ministerial posts to the People’s Party in exchange for support under conditions for early dissolution and constitutional reform, while Kla Tham has signalled conditional alignment with Anutin Charnvirakul.

• Economic and policy risks mounting: The baht slipped on the ruling amid fears of budget delays and policy drift. Business leaders warn of disruption to FY2025 disbursement and investment projects, while analysts highlight fragile growth, structural headwinds, and possible rate cuts by the Bank of Thailand if instability persists.

Paetongtarn Shinawatra Dismissed as Thai Prime Minister

Thailand’s Constitutional Court has dismissed Prime Minister Paetongtarn Shinawatra from office for breaching ethical standards in a leaked phone call with Cambodia’s Senate President Hun Sen amid escalating border tensions. The court’s decision, delivered today by a 6-3 vote, marks the abrupt end of Paetongtarn’s premiership just over a year after she assumed power, and plunges the country into fresh political uncertainty.

The Constitutional Court ruled that Paetongtarn Shinawatra had gravely breached ethical standards by portraying the Second Army commander as an adversary, projecting weakness and disunity between her government and the military, and thereby creating space for Cambodian interference. 

The judges noted that she was speaking in her official capacity as prime minister, not privately, and should have exercised greater caution given the presence of other officials and established security protocols. 

Her remarks, including suggestions of acquiescence such as “Whatever you want, just tell me”, were interpreted as premature capitulation of national interest, motivated more by the desire to maintain personal popularity and relations with Hun Sen than to protect Thailand’s sovereignty. In doing so, the court concluded, she diminished the dignity of both the premiership and the nation.

Deputy Prime Minister Phumtham Wechayachai continues serving as caretaker prime minister, and the existing cabinet will remain in place also in a caretaker capacity until parliament elects her successor.

What Happens Next

The House of Representatives must now convene to elect a new prime minister. While no deadline is imposed by law, the process is expected to unfold swiftly given the fragility of the governing coalition and mounting investor unease. A candidate will need at least 247 votes in the 500-member chamber to secure the premiership.

Names already circulating include veteran Pheu Thai figure Chaikasem Nitisiri, along with potential compromise candidates such as Anutin Charnvirakul, leader of the Bhumjaithai Party, and conservative stalwarts like Pirapan Salirathavibhaga and Jurin Laksanawisit. Some analysts have even floated a caretaker comeback for former Prime Minister Prayuth Chan-o-cha should coalition talks deadlock.

Coalition Arithmetic

Pheu Thai, with around 140 seats, faces an uphill battle to hold power after the Bhumjaithai Party’s withdrawal in June, which stripped the coalition of its parliamentary majority. To survive, the party will need to forge an agreement with conservative-aligned partners, namely Palang Pracharath, United Thai Nation, Chart Thai Pattana, and a cluster of smaller parties. Together, these blocs could push the total past the 247-seat threshold, but the arithmetic remains razor-thin.

Without such a deal, Pheu Thai risks ceding power to a cross-party coalition built around Bhumjaithai or another compromise figure, a scenario that would mark a dramatic reconfiguration of Thai politics.

Coalition Negotiations

Behind the scenes, political deal-making is already under way. Pheu Thai’s bargaining power has weakened sharply since Bhumjaithai’s withdrawal from the coalition earlier this year. Analysts warn that coalition partners may now push for a non–Pheu Thai candidate as prime minister, potentially elevating conservative-aligned figures.

Thai political scientists have cautioned that aligning diverse party interests will be “difficult and time-consuming.” Commentary in Thai media has compared the process to a “political Squid Game,” where successive Shinawatras have been removed while old-guard forces manoeuvre for renewed control.

The Bhumjaithai Party, although outside the government, remains a kingmaker. Just hours after the Constitutional Court dismissed Paetongtarn Shinawatra, political bargaining had already shifted into high gear. Anutin Charnvirakul, leader of the Bhumjaithai Party, projected confidence that his bloc commanded enough parliamentary support to back a new prime minister without relying on defectors, or so-called “cobras.” He underlined that both Bhumjaithai and the People’s Party shared a consensus: Parliament should be dissolved within four months to allow for fresh elections and a new constitutional framework.

Reports in Thai media suggested that a covert arrangement was already taking shape, with Bhumjaithai prepared to offer as many as eight ministerial posts to nominees put forward by the People’s Party in exchange for its backing. In return, the People’s Party has demanded clear conditions: the new prime minister must commit to dissolving Parliament within months and to holding a referendum on constitutional reform. Yet cracks are visible within the opposition camp, with factions resisting the idea of supporting a Bhumjaithai-led government.

In parallel, Anutin also met with the Kla Tham Party, whose deputy leader Narumon Pinyosinwat confirmed that their political direction was broadly aligned. However, she said the party would need to consult internally before deciding whether to endorse Anutin as prime minister. The outreach to Kla Tham underscores the breadth of Bhumjaithai’s manoeuvring as it seeks to build a viable majority in the days following the ruling.

Uncertain Weeks Ahead

The verdict represents yet another abrupt turn in Thailand’s political trajectory, where court rulings have repeatedly upended elected governments over the past two decades. 

For the Shinawatra family, it is a familiar blow. Paetongtarn’s father, Thaksin, and aunt, Yingluck, were both removed from office under controversial circumstances.

Markets reacted nervously, with the baht sliding in afternoon trade amid concerns over budget delays and stalled investment approvals. Business leaders and diplomats privately warned that prolonged uncertainty could dent investor confidence and complicate delicate negotiations, including those with Cambodia following recent border clashes.

For ordinary Thais, the ruling threatens to deepen the cycle of political instability. While no major street protests were reported immediately after the verdict, observers caution that polarisation could intensify in the coming weeks, especially if parliament appears unable to find a path forward.

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Business leaders expressed concern that the leadership vacuum could weigh on confidence and delay key fiscal decisions. Kriengkrai Thiennukul, chairman of the Federation of Thai Industries, warned that the political transition may stall disbursement of the 2025 budget and investment projects, although he noted that Thailand’s economy still holds recovery opportunities if public and private sectors act quickly with support measures.

Analysts warn that Thailand’s political turbulence will weigh heavily on economic sentiment unless a swift and credible transition is achieved. Erica Tay of Maybank noted that policy continuity and stimulus efforts are at risk, while Mohit Mirpuri of SGMC Capital stressed that markets are less concerned with personalities than with stability itself. 

Kasem Prunratanamala, Head of Thailand Research at CGS International, suggested that if Pheu Thai can hold its coalition together, policy disruption may be limited; however, others see the crisis as symptomatic of deeper fragility. 

Gary Tan of Allspring Global Investments cited structural weaknesses, with growth stuck near 2%, while Clifford Lau of William Blair described the turmoil as a distraction from pressing economic challenges in exports, tourism and consumption. 

Meanwhile, Trinh Nguyen of Natixis predicted that the Bank of Thailand may be forced to cut interest rates in response to both political instability and sluggish growth. 

Beyond the markets, The Guardian observed that Paetongtarn’s removal raises questions about the durability of the Shinawatra dynasty itself, given repeated judicial interventions and ebbing public support.

The next prime ministerial vote will test whether Pheu Thai can maintain a grip on power through pragmatic alliances or whether the ruling accelerates a shift towards a conservative-led compromise government. Either way, Thailand now faces another period of political brinkmanship, with policy, investment, and regional diplomacy all hanging in the balance.