TThailand’s Constitutional Court dismissed Prime Minister Srettha Thavisin from office after finding him guilty of ethical violations, plunging the Southeast Asian country into a new phase of political turmoil.
Srettha violated constitutional provisions on integrity and ethical standards by appointing a dubious lawyer as a cabinet minister in April, the nine-member court said in its verdict on Wednesday. The judges voted 5-4 to dismiss Srettha and his cabinet.
The court’s decisions are final and cannot be appealed.
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Srettha’s ouster risks political chaos in Thailand, where the coalition government cobbled together after a chaotic general election last year is facing legal proceedings. Foreign investors have been pulling money out of the country, fearing both political risk and the government’s failure to revive Southeast Asia’s second-largest economy after a decade of average annual growth of less than 2 percent.
Srettha told reporters he was saddened by the court decision and hoped the next prime minister would be elected by parliament soon. The government’s dismissal will affect key economic policies, including a controversial $14 billion program to stimulate the economy.
The country’s leading stock index fell as much as 1.3 percent, while the baht gave up its gains and traded little changed against the dollar.
“The decision will not be well received by markets, given the increasing political uncertainty and associated downside risks to growth arising from potential unrest and delays in the implementation of economic policy,” said Krystal Tan, economist at Australia & New Zealand Banking Group. “We will have to wait and see whether we end up with a sustained policy vacuum.”
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The ruling came after a group of former senators complained about the appointment of Pichit Chuenban as a cabinet member, saying he was not qualified for the post because he was jailed in 2008 for contempt of court following a bribery attempt. The lawyer represented former Prime Minister Thaksin Shinawatra, who is considered the de facto leader of Srettha’s Pheu Thai party.
Srettha became prime minister after a deal between Pheu Thai and its conservative allies allowed Thaksin to return to Thailand after living in self-imposed exile for 15 years. Thaksin’s indictment in a royal defamation case in June and now Srettha’s ouster pointed to the possible collapse of that deal.
The ruling against Srettha came days after the same court dissolved the country’s largest opposition party, Move Forward, which had won the most seats in the 2023 elections but had been excluded from power.
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Srettha’s ouster poses risks to economic growth, particularly if political horse-trading between the coalition parties drags on and a power vacuum could emerge. Foreign investment could come to a halt as markets await more clarity on who will lead the country.
Srettha will leave office before he has managed to raise economic performance to a level comparable to that of other countries in the region. His term in office also saw a dispute with the Bank of Thailand over its interest rate, which unsettled the markets and raised doubts about the central bank’s independence.
Thailand’s financial markets have been rocked by recent political unrest, prompting foreign investors to pull more than $3 billion from the country’s stocks. The benchmark SET stock index has been among the worst performers of all global bourses tracked by Bloomberg over the past year, while the baht has lost about 3 percent this year.
