Five ticking time bombs for Anutin’s second government: energy, debt and political cases

Anutin Charnvirakul has formally taken office for a second term as prime minister and is now moving into the process of forming a new cabinet under a Bhumjaithai Party-led administration.

His second term begins at a time of mounting challenges—especially on the economic front—described as a series of “ticking time bombs” that will require urgent management. Key pressure points include:

1) Managing the energy crisis as Middle East tensions persist

The prolonged conflict in the Middle East, particularly tensions around the Strait of Hormuz, has raised concerns over global oil supply and added a risk premium that is driving elevated price volatility.

While the US Energy Information Administration (EIA) has assessed a base-case average Brent price of US$58-60 per barrel in 2026, analysts say the short-term impact of war could push prices to US$75-80, especially if shipping routes are disrupted. In a worst-case scenario, average prices could rise above US$100 per barrel, putting heavy pressure on Thailand’s Oil Fuel Fund, which would have to subsidise prices to reduce the burden on the public.

The Oil Fuel Fund’s latest position is reportedly more than 12 billion baht in deficit after a 15-day diesel price freeze.

The government is expected to manage both volume and price. On supply, Anutin has said pump shortages should ease within two weeks. On pricing, the government may need to use a diesel price ceiling to prevent fuel costs rising so sharply that they worsen living costs and trigger political pressure on the government itself.

2) US tariffs and rising trade protectionism

Even after the US Supreme Court ruled against President Donald Trump’s reciprocal tariff measures, the US is still pursuing a more intense trade protection approach—using tariff barriers to protect domestic industry and raise revenue, especially targeting countries running trade surpluses with the US.

The US has reportedly invoked Section 301 against 60 economic jurisdictions worldwide, including Thailand, with goods under particular scrutiny including automobiles, machinery and rubber, amid allegations of dumping and excess capacity contributing to a large Thai surplus.

Thailand will need a dedicated negotiating team to engage the US continuously to reduce the risk of retaliatory tariffs or other trade measures. The response, analysts say, must also include seeking new export markets and accelerating additional free trade agreement (FTA) talks to expand opportunities.

3) Rising fiscal risk and shrinking fiscal space

Thailand’s public debt is now about 66% of GDP, or more than 12.66 trillion baht. While still within the fiscal discipline ceiling of 70%, the level is being closely watched because Thailand’s fiscal space has narrowed significantly.

If the government continues major stimulus measures and prolonged energy subsidies, public debt could rise faster than previously projected, forcing the new administration to revisit its medium-term fiscal plan.

This could also affect Thailand’s credit outlook. In 2025, Fitch Ratings and Moody’s reportedly revised Thailand’s outlook from stable to negative, a warning signal if new policies push public debt higher.

4) Inflation, prices and the cost of living

After fuel prices rose in March 2026, the Commerce Ministry signalled that inflation could begin to climb after several months in negative territory.

The National Economic and Social Development Council (NESDC) estimates that if oil stays above US$100 per barrel, inflation may reach 1.9%. If crude rises beyond US$120 per barrel, inflation becomes harder to forecast but could exceed 3%.

Higher oil prices lift production and transport costs, pushing up prices across many goods. Even if some macro indicators remain steady, households are still facing living costs that outpace income, as higher energy costs feed through into consumer staples.

The Commerce Ministry’s consumer confidence index for February 2026 rose to 53.7, the highest in nine months, supported by hopes of post-election political stability. However, the index remains far below 100, suggesting most consumers are still worried about rising prices and are cautious with spending. Real purchasing power remains fragile and has not fully recovered—making it another difficult test for the government as economic risks build.

5) Government stability and political cases

Another risk is political stability, particularly from sensitive cases that could affect confidence in the Bhumjaithai Party—most notably the Khao Kradong case and the Senate collusion case. Even if the cases are ultimately dismissed, they could still weigh on credibility.

A further long-term risk is the possibility of corruption scandals within the government. While Anutin has pledged strict oversight and integrity standards for ministers, any major controversy could still erode public support for the administration and its leadership.

Nonarit Bisonyabut, a senior researcher at the Thailand Development Research Institute (TDRI), said the government’s urgent policy response to the Iran war focuses on three areas: oil, natural gas, and chemicals such as fertiliser and plastics. He said early planning is essential because the opposing sides have yet to find a way out, creating supply chain disruption that could lead to production stoppages and inflation.

On the work of ministers in relevant portfolios, he said he has seen Commerce Minister Suphajee Suthumpun taking a more active role in controlling prices and trying to prevent consumer exploitation, which requires more intensive enforcement. He added that Foreign Minister Sihasak Phuangketkeow has played a role in accelerating negotiations to purchase oil from Russia.

“Although we can see ministers in the government’s economic team moving quickly, we have to recognise that existing tools may only stabilise the situation for about three to four months. So if the war-driven turbulence goes further than this, we need to start thinking about long-term solutions to ensure the country can get through it,” Nonarit said.

On the challenge of high public debt and global credit ratings, he said a high public debt level leaves limited budget space to respond to crises. He noted that the previous government’s spending on cash handout schemes such as “Let’s Go Halves” had reduced fiscal room, and he said he has yet to see a concrete plan from the Finance Ministry. He expressed concern that the government might focus mainly on raising the debt ceiling to subsidise energy prices and pursue short-term economic stimulus without sufficient caution, which he warned could be dangerous for the economy.

“The government should start an energy-saving campaign to tackle the crisis now, by raising the level of alerts and putting temporary solutions in place — such as increasing coal use in the short term and accelerating support for alternative energy,” Nonarit said.