Chaiyot Jiwangkul, head of research at Krungsri Securities (KSS), assessed the potential impact to the Thai economy following the announcement for dissolution of parliament earlier today as economic growth could stagnate.
Earlier this morning, Danuporn Punnakanta, spokesperson for the Pheu Thai Party, has confirmed to reporters that Phumtham Wechayachai, acting Prime Minister, has submitted a royal decree to dissolve Parliament for royal assent.
The decision to dissolve Parliament is widely seen as a strategic maneuver to prevent Bhumjaithai Party leader, Anutin Charnvirakul, from forming a government with the People’s Party.
Still, the dissolution of the Thai government’s parliament still requires royal endorsement from His Majesty the King.
Mr. Chaiyot stated that as the uncertainty continues, this could slow the spending despite the FY2026 Budget Bill recently passed the Senate approval. He asserted that economic policies could become slower if Anutin Charnvirakul sits as the Prime Minister of Thailand due to the minority seats in the parliament. This would impact the Thai stock market as well.
As for the dissolution of the government, Mr. Chaiyot expected a brief panic to the Thai stock market. During the three to four months void, economic push could become slower, especially with the government spending.
However, he noted that Thailand could see a surge in spending during the election campaign and the Thai bourse could recover. He believed that a drop in SET Index is an entry point for accumulated stocks ahead of the election. Once the government is formed, the spending could accelerate due to the pent-up during the void period.
In the case of a royal endorsement for parliament dissolution, Mr. Chaiyot recommended CPALL and HMPRO for the retail segment. Meanwhile, MTC and KTC are top picks to benefit from the spending surge ahead of the election.
