The sacking of Thai Prime Minister Yingluck Shinawatra could lead to further political unrest in the country, economists said, prompting some to review their growth forecasts.
Following months of political turmoil, Thailand's Constitutional Court ruled to remove Yingluck on Wednesday, along with nine other cabinet ministers. Yingluck was found guilty of abuse of power related to the removal of Thawil Pliensri from the post of National Security Council secretary general in 2011.
Global research house Capital Economics said in a note that if a resolution was not found soon, their below consensus 2 percent gross domestic product (GDP) growth forecast for 2014 would come under threat. Meanwhile Japanese investment bank Nomura said the ruling added downside risks to its 2.4 percent growth forecast.
Thai stocks fell 0.3 percent at Thursday's open. The market fell 18 percent between late October and early January this year when the political crisis first came to a head. It has since rebounded 8.5 percent year to date.
"The decision leaves the country's political deadlock firmly in place and there is now a large risk of renewed violence," said Krystal Tan, Asia economist at Capital Economics.
Wednesday's ruling is likely to upset government supporters who will be displeased with Yingluck's ousting. The government's opponents will also be dissatisfied as part of the caretaker cabinet still remains in place.