Thailand's economic outlook is in disarray following the removal of Prime Minister Srettha Thavisin in an ethics case that involved his appointment of a lawyer with a criminal conviction to his cabinet.
Mr Srettha's administration planned to rejuvenate the economy through various populist initiatives, including its flagship digital wallet handout expected to inject around 450 billion baht into the economy.
The handout was estimated to increase economic growth by 1.2-1.8 percentage points over the course of the scheme, but the turmoil surrounding his ouster now threatens to derail these efforts.
REAL SHOCK
The verdict to remove Mr Srettha from his post was a "real shock" to the Federation of Thai Industries (FTI), which is concerned about the discontinuation of government policies, as this would deal a blow to the Thai economy, especially investment.
Investors always consider whether certain economic policies will continue if an unwanted event occurs that terminates a government's ongoing work, said Kriengkrai Thiennukul, chairman of the FTI.
Some investors who delayed their decision to invest in new projects may decide not to expand their businesses in Thailand, said Mr Kriengkrai.
It is quite possible these investors will shift their investment plans to neighbouring countries, he said.
Before the court's verdict, many investors asked the FTI about the political outlook in Thailand as they wanted clear and accurate information to plan their investment here.
"They were in wait-and-see mode. After the court verdict, they can make their decision more easily," said Mr Kriengkrai.
The FTI wants Thailand to ensure the continuity of government policies, promoting and encouraging both Thai and foreign investors to grow their businesses in the country.
Uncertainties, especially in politics, can cause Thailand to lose many business opportunities, he said.
Acting Deputy Finance Minister Julapun Amornvivat agreed, saying the premier's removal is likely to impact investor confidence and affect the implementation of various government policies.
Regarding the digital wallet handout, Mr Julapun said the scheme will need to wait for a new government, but the Pheu Thai Party, which is leading the formation of a new government, is committed to pushing forward with the party's key policies, including the digital wallet scheme.
The scheme was expected to be unveiled in the fourth quarter this year.
LIMITED IMPACT
Somjai Phagaphasvivat, an independent political and economic analyst, said the impact of Mr Srettha's removal will likely have a psychological effect on the Stock Exchange of Thailand, possibly causing foreign investors to delay their investments in Thailand.
However, this impact is unlikely to last long, as the coalition government will likely remain the same, he said.
While the next prime minister is a mystery, including whether the candidate will hail from the Pheu Thai Party, Mr Somjai said he believes the government's key policies, especially the digital wallet handout, will be implemented.
"Even if the new prime minister is not from the Pheu Thai Party, the party still holds the most seats in the coalition government, giving it bargaining power in a new administration," he said.
"Under a new government with the same coalition parties, the continuity of government policies, including the digital wallet, Ignite Thailand and other projects, will remain intact."
Chaichan Chareonsuk, chairman of the Thai National Shippers' Council, described the Constitutional Court's dismissal of Mr Srettha as a reset for the government.
He said the process of selecting a new leader should not be prolonged, as it could have serious repercussions for exports and foreign direct investment.
"The government must act swiftly to restore investor confidence and trust, as the political vacuum caused by this removal could undermine business confidence and hinder the country's economic growth this year," said Mr Chaichan.
He stressed that the caretaker government should adhere to a unified policy, establishing a strategic action plan that can be implemented immediately.
SEAMLESS TRANSITION
Aswin Yangkirativorn, chief executive of Thai Lion Air, said the new prime minister and cabinet should continue the tourism and aviation policies from the previous government led by Mr Srettha, including Ignite Tourism Thailand and the aviation hub scheme.
In the past year, the government implemented policies and promoted tourism, including granting visa-free entry for travellers from 93 countries to Thailand, as well as pushing the nation as a concerts and events hub.
The administration also proposed developing and investing in new airports, which Mr Aswin said is an initiative that should be maintained.
He said this upheaval should not disrupt tourism sentiment, and travellers will continue to visit Thailand.
Additional reporting by Molpasorn Shoowong