Fitch Ratings highlights Thailand’s political instability following the approval of new Prime Minister Paetongtarn Shinawatra. While policy continuity is expected, risks persist, affecting investor confidence and growth prospects.
Fitch Ratings highlights the importance of Thailand’s new Prime Minister, Paetongtarn Shinawatra, receiving swift parliamentary approval, which was endorsed by the royal establishment on August 18. This move aims to maintain policy continuity amid Thailand’s volatile political landscape, which poses risks to policymaking and investor confidence.
Political uncertainty has intensified following the dismissal of former Prime Minister Srettha Thavisin for ethics violations and the dissolution of the Move Forward party. These developments raise concerns about the stability of governance, although Fitch anticipates Shinawatra will uphold key policy initiatives, given the dominant role of the Pheu Thai Party.
Potential delays in budget approvals for FY25 appear minimal, and the delayed digital wallet scheme, costing approximately 2.4% of GDP, may stimulate the economy. However, political volatility historically hampers effective policymaking. With Shinawatra’s appointment, the risk of unrest seems low, yet the threat of heightened political instability remains, affecting economic growth and investor confidence.
Source : Fitch Ratings Warns Thailand of Negative Ratings If Political Risks Continue
