Standard & Poor's Ratings Services has affirmed its 'BBB+' long-term and 'A-2' short-term foreign currency sovereign credit ratings, and its 'A-' long-term and 'A-2' short-term local currency ratings on Thailand. The outlook on the long-term ratings is stable.
The rating agency also affirmed the 'axAA/axA-1' long- and short-term Asean regional scale ratings on Thailand. Our transfer and convertibility (T&C) assessment remains 'A'.
The company based its decision on Thailand's strong external profile, modest government debt, and a track record of effective monetary policy. However, the country's ongoing political instability and its relatively low-income economy constrain the ratings.
The S&P said the stable outlook reflects its expectation that Thailand will be able to preserve its external, fiscal, and monetary strengths in the face of the current political turmoil within the next two years.
It may lower the ratings, however, if political and institutional stability deteriorated beyond what have been observed in the past seven years.
“This is likely if persistent widespread violence breaks out. We may also lower the ratings if the country's fiscal or economic indicators weaken significantly,” it said in latest statement issued Thursday.
The firm may raise the rating if political uncertainties diminish markedly, to help improve economic and financial indicators. Such a scenario is likely if the two key political factions in Thailand manage to negotiate a lasting agreement, it said.