BANGKOK — The political fate of Thai Prime Minister Paetongtarn Shinawatra remained uncertain Thursday after mounting opposition calls and street protests for her to resign following a leaked phone call in which she criticized her army.

The government was at risk of collapse after the exit of the second-largest party in the coalition, the conservative Bhumjaithai Party, on Wednesday. Three parties in the 10-member alliance, on whom the fate of the coalition hung, met on Thursday, with two of them saying they would stick with Paetongtarn’s administration. The other one didn’t disclose its decision.

The latest political turmoil, which caused a selloff in the nation’s stocks, was triggered by the defection of a major ally following weeks of infighting, as well as comments the prime minister made in a leaked phone call appearing to criticize the Thai army’s role in a border dispute with Cambodia.

The remarks were made during a phone call with a former Cambodian leader, Hun Sen, and subsequently leaked, prompting opposition parties to call for Paetongtarn to resign and activists to take to the streets in protest.

It remains unclear how the crisis will unfold. Even if the prime minister is able to retain the support of the three allies in her coalition, she will quickly need to prepare a new cabinet lineup, after Bhumjaithai’s exit vacated eight seats in the cabinet.

The country’s biggest opposition party had called on Paetongtarn to dissolve the lower house of parliament and pave the way for a snap election ahead of the next scheduled vote in 2027.

‘Security Threat’

The 38-year-old prime minister apologized for the leak on Thursday, saying it represented a “national security threat.” Earlier this week, she’d explained that her remarks about the army were part of a negotiation strategy to ease tensions with Cambodia.

Thailand has formally lodged a complaint with the Cambodian Embassy, Paetongtarn said, adding the government was “deeply disappointed” that the private conversation with Hun Sen was recorded without her knowledge and subsequently leaked. She didn’t address mounting public pressure for her to resign.

The latest political turmoil adds further risks for foreign investors, who have dumped a net $2.3 billion of Thai stocks this year. The nation’s benchmark stock index has slumped 22% — among the worst performers globally. The decline has been deepened by concerns that US threats of a 36% tariff would worsen the outlook for growth and hurt company earnings.

Krystal Tan, an economist at ANZ Group Holdings Ltd, said the political uncertainty “will further weigh on business investment, and could complicate the implementation of key economic policies at a time when the economic landscape is already very fragile and private sector growth drivers are lacking.”

Bhumjaithai’s exit threatens the government’s stability, weakening the fragile coalition formed in 2023 through a deal between royalist conservatives and former Prime Minister Thaksin Shinawatra, a Pheu Thai power broker.

The party cited the leaked audio as the reason for leaving the coalition, but tensions were already high. Bhumjaithai leader Anutin Charnvirakul had threatened to quit earlier in the week over plans to remove him as interior minister — a role seen as pivotal in elections as it provides access to local political forces.

Without Bhumjaithai, the coalition holds only a slim majority of around 253 lawmakers, just over half of the 493-member House of Representatives. That would potentially complicate the passage of July legislation, including a contentious casino-legalization bill and the next fiscal budget.

“They’re in serious trouble,” said Kevin Hewison, emeritus professor of Asian Studies at the University of North Carolina at Chapel Hill. “The ultra-royalists have been handed this gift by Hun Sen, which makes the prime minister’s position really difficult.”

Near the Government House on Thursday, hundreds of protesters filled streets and waved Thai flags, signaling a rise in nationalist sentiment sparked by last month’s border standoff with Cambodia.

“We will stay here until Paetongtarn leaves office,” said protest leader Pichit Chaimongkol, adding the group plans to escalate demonstrations.

The Royal Thai Army said it was “committed to democratic principles” and urged Thais to stay together. “The paramount imperative is for Thai people to stand united in collectively defending national sovereignty against those who harbor ill intentions toward the kingdom,” it said in a statement.

The embattled Paetongtarn may also need to brace for more legal challenges. Pro-royalist activists and senators plan to file complaints with the Constitutional Court and Election Commission, alleging breaches of ethics or national security laws — adding to the Shinawatra family’s mounting legal troubles.

Thaksin will be seeking to shore up support among some of the smaller opposition groups in parliament, said Hewison of the University of North Carolina.

“Now she looks bad, and she can be made to look bad, and this ultra-nationalist stuff is easy to stir up,” he said.

______

(With assistance from Philip J. Heijmans, Suttinee Yuvejwattana and Pathom Sangwongwanich.)

©2025 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.