August 26, 2025
BANGKOK – Analysts warn that the outcome could significantly influence business sentiment and economic stability.
Paetongtarn’s legal battle
On August 21, Paetongtarn testified before the Constitutional Court regarding an alleged leaked conversation between herself and Cambodian Senate President Hun Sen. Her legal team is now compiling evidence and a closing statement to submit to the court by August 25, as ordered.
The verdict is scheduled for August 29, a decision that many believe could reshape Thailand’s political landscape. Reports of a possible resignation were dismissed by Prommin Lertsuridej, the prime minister’s secretary-general, who stressed that Paetongtarn remains in office and that due process should be respected to avoid public confusion.
Former PM’s cases
In a separate development, the Criminal Court acquitted former prime minister Thaksin Shinawatra of lèse-majesté and Computer Crime Act charges linked to a 2015 interview with South Korean media.
The court ruled that prosecutors had failed to prove the remarks were defamatory or malicious towards the monarchy.
However, Thaksin still faces a pending case concerning his hospital stay at the Police General Hospital. The Supreme Court’s Criminal Division for Holders of Political Positions has set September 9 for its ruling and has summoned both the prison chief and Thaksin to attend.
Scenarios in Paetongtarn’s case
Visit Limlurcha, vice-chairman of the Thai Chamber of Commerce, said businesses were monitoring the prime minister’s case closely, noting two possible scenarios:
- Scenario 1: Paetongtarn remains in office
Political risk would temporarily ease, boosting investor confidence. The baht and the Stock Exchange of Thailand index could recover in the short term. Continuity in government policy—particularly infrastructure, tourism and SME support—would help sustain economic momentum. GDP growth in the second half of 2025 could reach the upper bound of 2.3%. Structural challenges, however, remain, including high household debt and the impact of US tariffs. - Scenario 2: Paetongtarn steps down
A resignation would force the cabinet to vacate, creating a policy vacuum. Budget disbursement and state investment projects could stall, while financial markets would face heightened volatility. Business confidence would weaken, and private investors would likely adopt a wait-and-see approach.
Business sentiment at stake
Kriengkrai Thiennukul, chairman of the Federation of Thai Industries, warned that ongoing political uncertainty was already weighing on investment decisions. Companies awaiting project approvals or construction permits may delay or even suspend plans indefinitely.
“If the domestic political situation remains unstable and government cohesion is questioned, Thailand risks losing competitiveness to its neighbours. Strong, unified governance is needed to restore investor confidence,” he said.
The private sector continues to urge stability, stressing that political unity and government credibility are key to sustaining foreign and domestic investment.