Thailand’s Constitutional Court dismissed Prime Minister Srettha Thavisin from office after finding him guilty of an ethical violation, throwing the Southeast Asian nation into a fresh bout of political turmoil.
Srettha breached the provisions on integrity and ethical standards as mandated by the constitution by picking a tainted lawyer to be a cabinet minister in April, the nine-member court said during a read-out of the verdict on Wednesday. The judges voted 5 to 4 to dismiss Srettha and his cabinet.
The court’s decisions are final and cannot be appealed.
Read More: 5 Takeaways from TIME’s Conversation with Thai Prime Minister Srettha Thavisin
Srettha’s ouster risks political chaos in Thailand, where legal challenges have threatened the coalition government cobbled together after messy general elections last year. Foreign investors have pulled money from the country, concerned by both political risk and the government’s failure to revive Southeast Asia’s second-largest economy after a decade of below 2% average annual growth.
Srettha told reporters that he was saddened by the court decision and hoped the next premier will soon be elected by the parliament. The government’s dismissal will affect key economic policies, including a controversial $14 billion cash handout program to stimulate the economy.
The nation’s benchmark stock index fell as much as 1.3%, while the baht pared gains to trade little changed against the dollar.
“The decision won’t be taken well by markets given the rise in political uncertainty and the associated downside risks to growth stemming from potential unrest and delays to economic policy implementation,” said Krystal Tan, an economist at Australia & New Zealand Banking Group. “We need to see whether we end up with a prolonged political vacuum.”
Read More: What the World’s ‘Most Complicated Election’ Means for Thailand’s Democracy
The verdict came after a group of former senators complained about the cabinet appointment of Pichit Chuenban, saying that he was not qualified for the job as he was jailed in 2008 for contempt of court following a bribery attempt. The lawyer was representing former prime minister Thaksin Shinawatra, who’s seen as the de facto leader of Srettha’s Pheu Thai Party.
Srettha became prime minister after a deal between Pheu Thai and its conservative allies, which helped Thaksin return to Thailand after 15 years in self-imposed exile. Thaksin’s indictment in a royal defamation case in June, and now Srettha’s removal, signaled the possible unraveling of that deal.
The verdict against Srettha came days after the same court dissolved the country’s top opposition party Move Forward, which won the the most number of seats in the 2023 election but was blocked from power.
Read More: The Man Who Upended Thailand’s Politics
Srettha’s ouster opens risks to economic growth, especially if political horse-trading among the coalition parties drag on and leave a potential power vacuum. Foreign investments may grind to a halt as markets await more clarity on who leads the nation.
Srettha will be leaving office before he could lift the economy’s output to rates comparable to regional peers. His tenure also saw a spat with the Bank of Thailand over its interest-rate path that spooked markets and raised doubts about central bank independence.
Thailand’s financial markets had been rattled by the recent political upheaval, prompting foreign investors to pull more than $3 billion from the nation’s stocks. The benchmark SET Index of stocks ranks as one of the worst performers of all global bourses tracked by Bloomberg in the past year, while the baht has lost about 3% this year.