The Japan Credit Rating Agency (JCR) has revised Thailand's outlook for its foreign and local currency long-term issuer rating to stable from negative to reflect a solid fiscal position and external balance and the stability of its banking system.
The JCR has affirmed its A- rating for foreign currency and A rating for local currency.
But the Thai economy faces threats from the fall of the working-age population in the near future and the possibility that the country may fall into a middle-income trap due to tightening of the labour supply-demand balance and a rise in labour costs.
A household debt burden exceeding 80% of GDP may impede recovery of private consumption this year.
Any strong recovery of exports is less likely due to concerns over the Chinese and European economies, so the JCR expects the recovery momentum of the Thai economy will be limited.
Possible effects on the economy of international capital outflows caused by the US Federal Reserve's future interest rate increases will need to be watched.
As the economy was hit by the impact of the political crisis when it had already been slowing due to the sluggishness of domestic and external demand, it decelerated sharply from the end of 2013 through early 2014.
However, the worst-case scenario of a direct conflict of opposing forces was avoided as a result of the coup last May 22.
The economy has been recovering moderately since the second half of last year amid the easing political situation.
The JCR will keep watching the development of political reforms and a general election supposedly to be held early next year.
Thailand's trade surplus expanded substantially in 2014 due mainly to a fall in imports resulting from the economic slowdown.
As a result, the surplus made up for a revenue account deficit, turning the current account into a surplus. But both trade and current account surpluses are expected to keep narrowing as imports gain, in keeping with a moderate economic recovery.
Although foreign direct investment contracted in 2014 due to the political crisis, it still remained comparatively high at US$11.8 billion.
The government has strictly abided by the stringent fiscal disciplinary framework defined in the Budget Procedures Act of 1959.
The fiscal-2015 budget projects a fiscal deficit equivalent to 2% of GDP. While public debt has tended to increase in recent years, its ratio to GDP remained comparatively low at 47.2% as of last Sept 30.