Thailand’s king has approved the dissolution of parliament, deepening political instability in the Southeast Asian nation ahead of an attempt by the U.S. to salvage a fragile ceasefire with Cambodia.

In a royal decree published Friday, King Maha Vajiralongkorn endorsed a request by Prime Minister Anutin Charnvirakul to dissolve parliament after his minority government failed to reach an agreement with the majority opposition People’s Party on proposed constitutional changes.

Under Thai law, a general election must be held within 45 to 60 days of the decree.

The opposition had reportedly threatened to file a motion of no confidence after Anutin’s government pushed to expand the powers of elected lawmakers under a planned constitution overhaul.

In a post on Facebook late Thursday, Anutin said he would “return power to the people.”

The political turmoil came as the Southeast Asian nation has been locked in a large-scale spat with Cambodia over long-disputed border claims. Tensions escalated this week as fierce clashes broke out at several locations along the border, which have reportedly killed at least 20 people and left dozens of civilians injured.

U.S. President Donald Trump is expected to speak with the leaders of the two countries soon, with Anutin saying the call has been scheduled for 9:20 p.m. Thailand time on Friday (8:20 a.m. Eastern).

Anutin, who assumed office in September after Paetongtarn Shinawatra was dismissed by Thailand’s Constitutional Court for an ethics violation related to the Cambodia dispute, has taken a tougher stance in the border clashes, a move that could fuel nationalist support for his conservative Bhumjaithai party ahead of the election.

Dissolving parliament would not affect Thailand’s military operations along the frontier, Anutin told local media outlets Friday.

Southeast Asia’s second-largest economy has grappled with tepid growth this year, expanding just 1.2% in the third quarter as the extended political turmoil, tariff uncertainty with the U.S. and border conflicts weighed on confidence.

Thailand’s benchmark SET Index, ranked among the world’s worst-performing equity gauges for 2025, has lost around 10% so far this year. The baht has been relatively resilient, strengthening over 7% this year against the greenback amid weakness in the dollar.

The latest tensions followed the collapse of a fragile ceasefire brokered in July by Trump, who threatened to halt trade talks with the two countries unless they ended the fight.

Thailand’s top diplomat, Sihasak Phuangketkeow, told his U.S. counterpart Marco Rubio Friday that the country was committed to finding a peaceful resolution, but sustainable peace must be backed up by actions, according to Reuters.

“We see a risk of the conflict persisting into early 2026 if the Thai government judges that adopting a harder line could bolster its political standing ahead of the likely early-2026 elections,” said Alexandra Hermann, lead economist at Oxford Economics.

The renewed tensions increased the downside risks to Oxford Economics’ 1.6% GDP growth forecast for Thailand in 2026, Hermann added, citing a potential loss of the Cambodian export market, labor-force shortages from an outflow of Cambodian workers and higher U.S. tariffs if trade talks stall.

Before the conflict, Cambodia was Thailand’s 11th-largest export market in 2024, according to data from the Ministry of Commerce, accounting for around 3% of total goods exports.

Bilateral trade has collapsed this year, with border crossings shut. The total value of Thailand’s exports to Cambodia plummeted 67% in October from a year earlier, Ministry of Commerce data showed.

Gareth Leather, senior Asia economist at Capital Economics, however, noted that a third of those exports are petroleum, which could easily find an alternative market, but the key risk would be Trump reintroducing higher tariffs on Thailand for breaking the ceasefire he had helped brokered.

“The biggest risk is that the breakdown of the ceasefire irritates the Trump administration as the truce had been one of the regional conflicts he claimed credit for helping to stabilize,” Leather added.

Meanwhile, a prolonged conflict could risk removing between 500,000 and 1.5 million Cambodian migrant workers from Thailand’s domestic labour force of around 40 million, Hermann estimates.