The upcoming general election probably won't have a major effect on the economy or the country's credit rating, says a report from Moody's Investors Service.
"We do not expect the elections to result in significant shifts in policies that would slow near-term economic activity, or alter sovereign credit quality," the report said. "In Thailand, where elections are scheduled to take place for the first time since the military took power in 2014, we judge related risks to be limited, particularly in light of the constitution passed in 2017 that ties the new administration to the current military government's development strategy, including implementation of the Eastern Economic Corridor."
Moody's said there is a "moderate probability" of recurrence of political tensions that could harm the economy, though the Thai economy has demonstrated in the past that it can maintain stability through political disasters.
The overall outlook for sovereign creditworthiness in the Asia-Pacific region looks "stable", according to the report published yesterday, but US-China trade tensions could limit growth and disincentivise investment while weakening debt affordability and raising government liquidity risk in emerging markets.
Moody's said the pace of economic expansion in Asia-Pacific will likely slow in 2019-20 but remain robust. Asia's emerging and frontier market economies will probably experience the sharpest deceleration in 2019, with likely median GDP growth rates of 5.5% and 5.2% respectively, weaker than 2018 estimates.
According to Moody's definition, Thailand does not fall under the category of frontier market, as its sovereign rating of Baa1 falls just above the threshold.
Growth in the advanced economies will likely slow to 2.5%.
As a region, Asia-Pacific will be relatively resilient in 2019. Large external buffers and a gradual reduction in reliance on external financing, driven by the increase in domestic savings and deepening of domestic markets, will support emerging markets in the region.
Government external debt to GDP has declined in the region and, on average, is the lowest among emerging and frontier economies globally, while external buffers increased and are higher than in other regions.
