Finance Minister Pichai Chunhavajira and banking exec Kobsak Pootrakool warn prolonged Thai-Cambodia war will devastate both economies. Tourism is down 15% and investor confidence is shaky. They call for urgent peace talks to protect regional stability and any prospect of economic recovery.
On Sunday, Finance Minister Pichai Chunhavajira and former minister turned banking heavyweight Kobsak Pootrakool sounded the alarm: a drawn-out war with Cambodia will hit both nations hard. Thailand is already on shaky ground—reeling from a March earthquake, a 15% plunge in foreign tourism since February and looming tariff threats from the Trump administration. Pichai didn’t hold back. He slammed Cambodia’s leadership, warning that Phnom Penh is torching its own credibility on the world stage. Worse still, he said, prolonged violence will gut confidence in Thailand—scaring off foreign investors and pushing tourism deeper into crisis.
Top Thai business and political leaders have raised the alarm over the deepening crisis along the Thai-Cambodian border. They fear that a prolonged military conflict could badly damage Thailand’s economy, weaken investor sentiment, and trigger a sharp decline in tourism. Unless swift diplomatic solutions are found, the consequences may ripple far beyond Thailand’s borders.
On Sunday, Deputy Prime Minister and Finance Minister Pichai Chunhavajira issued a strong statement calling for an immediate end to hostilities. In a post on his official Facebook page, he urged Cambodian authorities to cease all violent actions. He emphasised that only peaceful dialogue could restore trust and prevent further damage to both nations.
Urgent call from Thailand’s finance minister urges Cambodia to stop violence and restore peace
“As Finance Minister of Thailand, I urge Cambodia to stop the hostilities without delay,” he wrote. “Let diplomacy take over.”
He condemned attacks on civilian facilities such as hospitals, schools, gas stations, and convenience stores. These, he said, serve ordinary people and should never be targets. According to Mr. Pichai, these attacks not only violate international humanitarian law but also threaten regional security.
Moreover, he warned that Cambodia risks losing international credibility. Continued aggression, he said, could isolate Cambodia diplomatically and damage its economic future.
“The world is watching,” he wrote. “Cambodia’s credibility has been severely damaged. These actions undermine its own long-term interests.”
Mr. Pichai emphasised that peace is the foundation of prosperity. Without stability, trade, investment and cooperation will stall. He called on Cambodian leadership to uphold its previous commitments to peace and engage constructively with Thailand.
Thai financial leader warns prolonged border conflict will severely damage economy and investor confidence
Meanwhile, the economic concerns were echoed by Kobsak Pootrakool, a key figure in Thailand’s financial sector. Kobsak, a Senior Executive Vice President at Bangkok Bank and Chairman of the Federation of Thai Capital Market Organisations (FETCO), addressed the issue at a seminar held for senior economic journalists on July 26.
During his remarks at the 2025 Senior Economic Journalists’ Potential Development Project, he said the conflict could have far-reaching effects. “If this situation drags on,” he warned, “it will reinforce Thailand’s image as an unstable country.”
According to Kobsak, such an image will scare away investors and tourists alike. He stressed that Thailand cannot afford another blow to its economy, especially in a year when tourism was expected to drive growth.
Although the year began well—with tourist numbers rising 20% in early 2025—the momentum reversed after February. Since the Chinese New Year, Thailand has seen a steady 15% decline in tourist arrivals.
Tourism sector suffers a sharp 15% drop since February amid growing tensions on Thai-Cambodian border
This drop, Kobsak explained, has led to a 4.66% contraction in the tourism sector in the first half of 2025. Notably, this downturn comes at a time when the country needs strong tourism numbers to boost its post-pandemic recovery.
“These numbers are concerning,” Kobsak said. “The tourism industry was our best hope for driving the economy this year.”
While he acknowledged that earlier incidents—such as kidnappings and the March earthquake—played a role in damaging Thailand’s image, he believes the border conflict could leave a deeper scar. Unlike natural disasters, which are short-lived in global memory, military conflict leaves lasting doubts.
“In three or four months, people may forget an earthquake,” he noted. “But a war creates fear that sticks.”
Furthermore, he warned that if the conflict escalates, it could affect neighbouring countries like Laos. This would not only worsen the regional security situation but also spread economic uncertainty across Southeast Asia.
Conflict risks regional instability with potential economic fallout spreading beyond Thailand’s borders
“Instability spreads fast,” Kobsak said. “If we don’t contain this, the entire region could suffer economic fallout.”
Kobsak also called for immediate action from Thai leadership to resolve the situation through both diplomatic and military channels. He urged national leaders to send a message of control and stability to the international community.
“We must act before more damage is done,” he said. “This is unnecessary harm that could have been prevented through serious negotiations.”
At the same time, he offered encouragement to Thai troops stationed at the border, thanking them for protecting national sovereignty. However, he stressed that the most important solution must come from leadership—not conflict.
“The longer this lasts, the harder it will be to repair the damage,” he concluded. “Confidence, once lost, is slow to return.”
Thai leaders push for immediate diplomatic solutions to contain border conflict and restore confidence
The Thai government is now facing mounting pressure from both economic leaders and the public. Military readiness remains high along the border. Yet, business leaders are urging a return to diplomacy before the crisis deepens.
In addition, tourism operators have voiced concern over cancellations and booking slowdowns heading into the high season. Hotels in key destinations report increasing inquiries about security. Some international travel advisories have already been updated to reflect the heightened tensions.
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Investor groups are also watching developments closely. The Stock Exchange of Thailand (SET) has seen increased volatility in recent days, especially in the tourism and retail sectors. Foreign direct investment (FDI) inquiries have slowed, according to reports from industry observers.
Despite the troubling situation, both Pichai and Kobsak believe it is still possible to reverse course. However, they agree that time is running out.
“Peace is not optional,” said Pichai. “It is essential for economic survival.”
Ultimately, both leaders delivered a clear message: Thailand must act fast. Resolving the conflict quickly and diplomatically is the only way to protect its reputation, economy and people.
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Further reading:
Thai Deputy Minister of Defence explains Cambodia broke the Trump brokered ceasefire Sunday morning
Hot War rages on the Thai Cambodian border with Cambodian troops on the offensive in Chong Bok area
14 killed and over 100,000 evacuated as army brings in more guns trained on Cambodian border forces
Military blasts Cambodia for breaching international law by planting mines which injured 3 soldiers
