Defence minister's post left vacant in reshuffle
Until then, Deputy Defence Minister Gen Nattaphon Narkphanit will fill in as acting minister in the cabinet shake-up announced in the Royal Gazette, according to a source familiar with the matter.
The move has fuelled speculation that the vacancy is being held for Gen Chalermpol, said the source, asking not to be named.
Paetongtarn Shinawatra, speaking shortly before the Constitutional Court suspended her as prime minister on Tuesday over a leaked phone conversation with former Cambodian premier Hun Sen, insisted the defence ministry would carry on as usual under Gen Nattaphon's capable stewardship.
She neither confirmed nor denied speculation surrounding Gen Chalermpol becoming the minister after Sept 30.
Ms Paetongtarn declined to comment when asked whether she had deliberately refrained from appointing a new defence minister to succeed Phumtham Wechayachai — who is now interior minister — to avoid provoking a negative reaction from the armed forces amid the border dispute with Cambodia.
Mr Phumtham, meanwhile, voiced confidence in Gen Nattaphon's ability to serve effectively, citing his broad expertise and strong coordination skills.
Mr Phumtham, who is also a deputy prime minister, said he had no idea why Ms Paetongtarn decided to leave the defence minister's post vacant.
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Bangkok Post
an hour ago
- Bangkok Post
Political hiatus looms over economy
The Constitutional Court is expected to take 1-3 months to hand down the final verdict on the fate of Prime Minister Paetongtarn Shinawatra after the court suspended her from the post over a leaked recording of a phone call with former Cambodian leader Hun Sen. Most analysts anticipated a suspension during the investigation into a Senate petition accusing the premier of breaching ethical standards in violation of the constitution. "We expect the court to take 1-3 months, handing down a verdict possibly by September," said Kasem Prunratanamala, head of research at China-based CGS International Securities Group. If she is found guilty, she is likely to be banned from politics for 10 years. However, the parliament can still vote in a new prime minister from the available candidates, including Chaikasem Nitisiri from the ruling Pheu Thai Party, whom CGS believes could be the new premier, he said. The political overhang will continue to pressure the Stock Exchange of Thailand (SET) index, which has fallen by 23% this year, making it the worst performing market in the world year-to-date. "We believe investors have priced in various concerns, including the US's reciprocal tariffs, domestic political turmoil and a weak domestic economy," said Mr Kasem. "Protesters plan to rally again, but have yet to fix a date. We believe street rallies will once again disrupt businesses as consumers stay home for fear of violence, which could open the door for the military to intervene." Given domestic political uncertainties, he said Thailand may not have much bargaining power with the US regarding planned import tariffs of 36%. "The finance minister expects the tariff to be reduced to 10%, which we believe is too optimistic," said Mr Kasem. Nuttawut Wongyaowarak, head of research at Globlex Securities, said investors took heart from Tuesday's court ruling as it could prevent political protests from intensifying. "If the court did not accept the petition, protests against the prime minister were likely to escalate. Investors and the market do not like political turbulence," he said. RISING ECONOMIC CONSTRAINTS Amonthep Chawla, chief economist at CIMB Thai Bank, said following the premier's suspension, political uncertainty weighs on Thailand's economic outlook. Both domestic and foreign investors are becoming increasingly hesitant, with many delaying or reconsidering investment decisions. This caution is especially pronounced in sectors reliant on government spending, such as construction. "The private sector is likely to adopt a wait-and-see approach, particularly for projects tied to public budgets," he said. However, if the government can maintain political stability and ensure continuity in policy direction, the erosion of investor confidence could be contained, said Mr Amonthep, though he warned of tensions between the coalition parties. "Should coalition parties face pressure to reassess their alignment or withdraw support, the situation could escalate towards a House dissolution," he said. Mr Amonthep said disbursement of the current fiscal budget and planned stimulus budget is unlikely to be disrupted or delayed, as the government retains full authority and is not operating in a caretaker capacity. Still, a political collapse and House dissolution could delay the approval process for the fiscal 2026 budget, posing a risk to the economy from the fourth quarter of this year through the second quarter of next year, he said. TRADE TALK UNAFFECTED Sompop Manarungsan, president of Panyapiwat Institute of Management and an economic analyst, said he believes the suspension order is unlikely to have a significant impact on the Thai delegation to the US for tariff negotiations. He said the US is unlikely to focus on individual figures, but rather the entire Thai political system and whether it is mature and established. If Deputy Prime Minister Phumtham Wechayachai were to step in as acting prime minister, Mr Sompop said it would likely make the transition period smoother, particularly given the escalating domestic tensions such as the protests that occurred last Saturday. However, if the government is unable to carry on, then parliament should be dissolved and a new election held in order to preserve the system, he said. "I believe US officials understand Thailand's political model and that this situation has not yet reached a dead end," said Mr Sompop. "The suspension is unlikely to pose a limitation on the Thai delegation in tariff negotiations." CONFIDENCE SHAKEN Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said the premier's suspension would disrupt operations considerably and likely affect decision-making on important issues, making economic outlook more challenging. Thienprasit Chaiyapatranun, president of the Thai Hotels Association, said the court ruling reflects the instability of Thai politics, which can weaken investor sentiment. He said the administration should continue with an acting prime minister and new cabinet in place. "We should follow the situation over the next few months after the opening session of parliament on July 3," said Mr Thienprasit. Sanga Ruangwattanakul, president of the Khao San Road Business Association, said an acting premier and cabinet led by the Pheu Thai Party should continue working to solve the economic and tourism crises. Stimulus measures should be implemented as planned, as tourism operators must cope with tepid purchasing power and sluggish foreign arrivals, he said. During the low season this year, Khao San Road businesses anticipate 30% fewer tourists year-on-year, said Mr Sanga. He said it is difficult to predict whether protests against Ms Paetongtarn will be prolonged, as the acting cabinet is still led by her political party. Nuttanai Anuntarumporn, chief executive of Interlink Telecom Plc, said government fiscal 2026 disbursement could slow in terms of new project launches, as a new cabinet may not maintain current policies. Meanwhile, uncertainty surrounding US tariffs and domestic political stability is likely to delay both consumer and business spending, he said. For Interlink Telecom, its projects under independent agencies, such as the 5.4-billion-baht rural internet rollout, remain unaffected. TOO MUCH POLITICS With Ms Paetongtarn's political future hanging by a thread, ministers may not address all their full portfolio as they focus on political issues, including how to gain trust from people in the next election, said Tanit Sorat, vice-chairman of the Employers' Confederation of Thai Trade and Industry. Some ministers may be considering how to garner votes in the next general election if the court's verdict caves in the government, he said. "My question is who will fully work under these conditions?" said Mr Tanit. The political turbulence comes as Thailand needs a capable leader and a strong team of ministers to survive economic challenges that threaten to deal a blow to GDP growth this year, he said. The US's final reciprocal tariff rate on Thai imports is unknown, and a high rate would weaken Thai manufacturers' and exporters' competitiveness in the global market, said Mr Tanit. Meanwhile, the Thai-Cambodian territorial conflict is also straining the economy, and leaders are needed to address the situation, he said. The suspension of Ms Paetongtarn only added to the lack of trust in the prime minister, said Mr Tanit. "When businesspeople step away from their roles, they are ordinary individuals sharing the same feelings as other people," he said. CONSISTENT ENERGY POLICY Key energy development plans should remain intact even if there is a new premier, said Praipol Koomsup, an economist at Thammasat University who was a committee member under former energy minister Narongchai Akrasanee. One state project he pushed for continuity on is a direct power purchase agreement (PPA) that allows companies to buy renewable power directly from producers. Peer-to-peer renewable power trade was prohibited in Thailand, but the National Energy Policy Council approved a pilot project on direct PPA last year to facilitate sales of clean power to data centre projects.
Bangkok Post
2 hours ago
- Bangkok Post
Paetongtarn's suspension hits Thailand's troubled economy
Thailand's ruling coalition was already fraying when a court suspended Prime Minister Paetongtarn Shinawatra on Tuesday, raising fresh doubts about her survival, the country's economy and the future of a dynasty that has loomed over the Southeast Asian nation for decades. In a blow to a country long plagued by political instability, the Constitutional Court sidelined the 38-year-old leader over a complaint linked to a leaked phone call in which she appeared to criticise the army and side with Cambodia in a border dispute — a potential breach of conduct under the constitution. She has 15 days to respond. For now, Deputy Prime Minister Suriya Jungrungreangkit leads a shaky coalition. The developments could not come at a worse time for Thailand: once feted as an Asian Tiger economy for its export-led growth, the country is mired in slow growth relative to its peers, with households burdened by debt, a budget bill outstanding and the imminent threat of United States President Donald Trump's tariffs weighing down expectations. The government slashed its 2025 growth forecast by a full percentage point to 1.3% in May. Over at the central bank, Governor Sethaput Suthiwartnarueput is due to leave Sept 30, and a successor has yet to be named. 'No one is at the helm and the Thai ship is going nowhere,' said Thitinan Pongsudhirak, a professor of political science at Chulalongkorn University (CU) in Bangkok. 'The budget bill has to be passed, so that's coming up with the wobbly, weak coalition government.' Amid all the turmoil, the Bhumjaithai Party, the ruling coalition's biggest partner, exited last month following weeks of infighting, and there is no guarantee now others that had promised to stay will not follow. The court has yet to say how long it will deliberate, while a prolonged delay risks deepening the political vacuum, said Napon Jatusripitak, acting coordinator of the Thailand Studies Program at ISEAS-Yusof Ishak Institute. 'Thailand appears destined for a prolonged struggle to find a new prime minister and a political deadlock that could jeopardise the country's already fragile economic situation,' he said. Looming over everything is Thailand's influential military, which has led about a dozen coups since the kingdom's absolute monarchy was abolished in 1932 and has long been a key power broker in the country. The military and pro-military political parties were the key forces behind Ms Paetongtarn's eventual ascension to power after a key opposition party could not secure enough support to form a government following national elections two years ago. That uneasy alliance paved the way for her father, Thaksin Shinawatra, to return from a long exile. Even with the court's suspension, Ms Paetongtarn is not totally sidelined from power. Hours before the ruling Tuesday, she was named culture minister in a reshuffle expected to keep her in government. The new cabinet will be sworn in Thursday. But the damage may be permanent. A recent poll showed Ms Paetongtarn's approval rating at 9.2%. Thousands have protested, calling for her resignation. Ms Paetongtarn said Tuesday she accepts the court's ruling but gave little clarity on her future. 'I'm still a Thai citizen,' she said. 'I will continue to work for the country while my duties are suspended.' Even so, fears are growing the government could collapse before the next budget passes. The 2026 fiscal plan, due by August, is at risk. Burin Adulwattana, chief economist at Kasikorn Research Centre (KRC), said a lame-duck government would add uncertainty, hurting the baht and stocks. 'Big trouble' 'A key impact will be felt if the political turmoil leads to a budget delay,' he said. 'Without it, the economy will have big trouble.' The baht fell 0.1% on Wednesday morning. The yield on Thailand's benchmark 10-year bonds was little changed after declining three basis points a day earlier. The benchmark stock index, the world's worst-performing major equity market globally this year, rallied 1.9% Tuesday on expectations that Ms Paetongtarn's suspension will help reduce political tension. Whether things play out that way is far from certain. 'This suspension exerts further downside risk to a growth outlook already mired in uncertainty from US tariffs,' said Lavanya Venkateswaran an economist at Oversea-Chinese Banking Corporation (OCBC) in Singapore. 'The real question is what next. That needs to be answered sooner rather than later considering the stakes.' If the court ultimately rules against Ms Paetongtarn, she will be removed from office, triggering a parliamentary vote to pick a replacement from a list submitted before the 2023 election. Along with her father and aunt Yingluck, Ms Paetongtarn would be the third of the Shinawatra clan to be removed from office. Potential replacements Possible successors include the ruling Pheu Thai Party's Chaikasem Nitisiri, Bhumjaithai's Anutin Charnvirakul, United Thai Nation's Pirapan Salirathavibhaga, and the Democrat Party's Jurin Laksanawisit. Former prime minister Prayut Chan-o-cha, who led the last coup, is also eligible. And while a military takeover is always possible in Thailand, frustration over the country's economic performance under Gen Prayut ultimately pressured his government to allow for elections. 'The decision by the court today has heightened the coup risk a bit, but the last time they had a coup, they did not do well,' said Mr Thitinan of CU.
Bangkok Post
3 hours ago
- Bangkok Post
Suriya Jungrungreangkit set for single day as acting PM
Thailand's acting prime minister Suriya Jungrungreangkit is set to helm the country for only one full day Wednesday, standing in for suspended premier Paetongtarn Shinawatra before being replaced himself in a cabinet reshuffle. Transport minister and deputy prime minister Suriya Jungrungreangkit began his engagements by attending a ceremony in Bangkok celebrating the longevity of the Prime Minister's Office. The event marks the 93rd anniversary of an institution Mr Suriya is set to command for far fewer than 93 hours as Thailand reels from the suspension of Ms Paetongtarn, heiress of the country's dominant political dynasty. The Constitutional Court said Tuesday there was "sufficient cause to suspect" she breached ministerial ethics during a diplomatic spat with Cambodia, suspending her pending a probe that could last months. The 38-year-old Paetongtarn is the daughter of political heavyweight Thaksin Shinawatra, whose family and party have been jousting with Thailand's conservative establishment since the early 2000s. Power immediately passed to 70-year-old Suriya, a veteran operator with a reputation in Thai media as a political weathervane for always aligning himself with the government of the day. But his time as acting premier is set to be cut short by a cabinet reshuffle already scheduled before Tuesday's court bombshell. When it takes effect in an oath-swearing ceremony scheduled on Thursday, Mr Suriya is set to be superseded by incoming interior minister Phumtham Wechayachai. The ruling Pheu Thai Party said late Tuesday that Mr Phumtham will take over after the cabinet reshuffle because he will receive a deputy prime minister title that is higher in the order of succession than Mr Suriya. Waning influence Paetongtarn -- who became prime minister only last August -- assigned herself the culture minister position in the new cabinet before she was suspended, meaning she is set to keep a perch in the upper echelons of power. But analysts say her pause from office represents a dramatic waning of the Shinawatras' influence. Tuesday also saw the second day of Thaksin's criminal trial for royal defamation, in which he faces a possible 15-year sentence if convicted. Ms Paetongtarn has been hobbled over a longstanding territorial dispute between Thailand and Cambodia, which boiled over into cross-border clashes in May, killing one Cambodian soldier. When she made a diplomatic call to Cambodian ex-leader Hun Sen she called him "uncle" and referred to a Thai military commander as her "opponent", according to a leaked recording causing widespread backlash. A conservative party abandoned her ruling coalition -- sparking the cabinet reshuffle -- while her approval rating plunged and thousands mustered to protest over the weekend. Conservative lawmakers accused her of kowtowing to Cambodia and undermining the military, entering a case with the Constitutional Court alleging she breached the constitution's ministerial ethics code.
