Paetongtarn is barred from exercising prime ministerial powers while the nine-member court considers the petition by a group of senators, it said in a statement. The ruling to suspend her was backed by seven out of nine judges, the court said.

While the court set no deadline to adjudicate on the petition, it gave Paetongtarn 15 days to respond to the allegations. In the interim, Suriya Jungrungreangkit, a deputy prime minister and transport minister, will be the acting leader, according to officials.   

The petitioners allege that the prime minister’s comments critical of the nation’s army in a leaked phone call with former Cambodian leader Hun Sen constitute a violation of ethical standards — grounds that could lead to her dismissal. The youngest daughter of influential former premier Thaksin Shinawatra, Paetongtarn had resisted calls to resign, despite the exit of a major party from her coalition.

The legal troubles faced by Paetongtarn and her father — who went on trial for a royal defamation case on Tuesday — suggest that a deal the clan had made with the pro-royalist establishment may be coming under strain.

Read: All About Thailand’s Prime Minister Who’s Under Siege: QuickTake 

The uncertainty over Paetongtarn’s future and her coalition is likely to slow efforts to accelerate growth in an economy that’s lagged the pace of expansion in regional neighbors such as Indonesia and the Philippines. The political turmoil also raises questions about Thailand’s ability to negotiate down a punitive 36% U.S. tariff on exports and the government’s ability to pass key bills like the budget for next year.

“The PM’s suspension has heightened political uncertainty, raising concerns if this will lead to a lame duck government,” said Burin Adulwattana, chief economist at the Bangkok-based Kasikorn Research Center in Bangkok. If the budget bill is delayed, “it will be a big drag on the economy, which is already fragile and face the threat of U.S. tariffs.”

The baht fell on the news, while the yield on benchmark 10-year bonds edged lower. The benchmark stock index, among the world’s worst-performing major equity markets globally this year, rallied 1.9% on expectations that Paetongtarn’s suspension will help reduce political tension. 

The court blow is the biggest threat yet to Paetongtarn’s nascent political career and her 10-month-old government. She came to power last year after her predecessor and a Thaksin ally, Srettha Thavisin, was ousted in a similar ethics-related case. 

Paetongtarn, 38, is the third member of the Shinawatra clan to lead the country after Thaksin, the billionaire patriarch of the family, and his sister Yingluck Shinawatra, who remains in exile after fleeing in 2017 to evade corruption charges. 

“This could be the end of the Shinawatra dynasty,” said Titipol Phakdeewanich, a political science lecturer at Ubon Ratchathani University. “The court’s decision is unsurprising given the growing opposition against the prime minister. Her political naivety is also undeniable.” 

The suspension came just hours after Paetongtarn’s new cabinet line-up, which was meant to shore up support of allies in her coalition government, was unveiled. While she will need to step away from the top office, Paetongtarn is expected to still have a seat in the cabinet as the new Minister of Culture after the new appointees are sworn in on Thursday. 

Dynastic Rule

Paetongtarn’s government was plunged into a crisis when Hun Sen leaked the phone recording showing the premier siding with him rather than the Thai army while discussing solutions to a simmering border disputes. That angered conservative-leaning activists and opponents, who organized the biggest public protests in years to demand her ouster.  

Before the dispute, the Shinawatras and the Huns of Cambodia — two of Southeast Asia’s most influential political dynasties — had enjoyed close personal relations for decades. Hun Sen previously referred to Thaksin as “brother.” 

The border row with Cambodia has intensified with both countries enacting tit-for-tat measures to restrict trade and cross-border movement. Last week, Hun Sen — father of current Cambodian Prime Minister Hun Manet — called for a leadership change in Thailand, saying he doubted Paetongtarn’s ability to resolve the escalating conflict. 

The handling of the Cambodia dispute has also dented the Thai prime minister’s popularity. Support for Paetongtarn fell to single digits in a recent opinion poll, with only 9.2% of respondents backing her, according to a June 19–25 survey. 

Paetongtarn said she accepted the court decision, and her actions were with the country’s best interest at heart. 

Still, her legal challenges are far from over. Her opponents have also approached the anti-graft agency and the Election Commission in efforts to force her removal.

“The government will reach a breaking point well before the court even renders its final verdict,” said Napon Jatusripitak, acting coordinator of the Thailand Studies Program at ISEAS-Yusof Ishak Institute. “The collapse of her administration appears to be a matter of when, not if.”