S&P, a global credit rating company, has affirmed Thailand’s rating at BBB+ with a stable outlook, citing the country’s growth potential and financial stability.
S&P Global Ratings has affirmed Thailand’s sovereign credit ratings at ‘BBB+’ with a stable outlook. The ratings reflect the country’s strong external balance sheet, moderate government debt, and conventional fiscal and monetary policies.
Key Takeaways
- Thailand’s economy is expected to accelerate in 2024, supported by planned fiscal measures and a recovery in the tourism sector.
- The stability of Thailand’s new government and its ability to collaborate on policymaking will be crucial for the country’s economic growth.
- Despite political uncertainty and modest per capita income, Thailand’s strong external balance sheet and moderate government debt contribute to its credit ratings.
The stable outlook is based on expectations of sustained economic recovery and fiscal stability. However, the ratings could be lowered if economic growth weakens significantly or if political instability persists. On the other hand, the ratings could be raised if there is an extended period of enhanced political stability.
The report also mentions that Thailand’s economic growth is expected to accelerate in 2024, supported by fiscal stimulus measures and a recovery in the tourism sector. Government debt is projected to rise in 2024 due to a digital wallet scheme, but fiscal deficits are expected to normalize from 2025 onward. Overall, Thailand’s external position and liquidity are strong, and the Thai baht is expected to gradually strengthen in the coming years.
Return of fiscal stimulus will push borrowing higher in fiscal 2024
Government borrowing is expected to increase in fiscal year 2024 due to funding for the digital wallet scheme. Despite the delay in the budget, government spending is expected to remain low in the first half of the fiscal year. The Pheu Thai Party has promised to introduce a large-scale, one-time digital money transfer of THB10,000 per eligible person in May 2024. We believe that the stimulus program will be similar to what the government is currently pursuing, despite challenges and delays. Therefore, we estimate that an additional borrowing of THB500 billion (approximately US $14.3 billion) will be needed for the program.
Thailand – Selected Indicators
| ECONOMIC INDICATORS (%) | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 |
| Nominal GDP (bil. LC) | 15,489 | 16,373 | 16,889 | 15,661 | 16,167 | 17,370 | 18,147 | 19,365 | 20,339 | 21,393 |
| Nominal GDP (bil. $) | 456 | 507 | 544 | 500 | 506 | 495 | 514 | 538 | 569 | 602 |
| GDP per capita (000s $) | 6.6 | 7.3 | 7.8 | 7.2 | 7.2 | 7.1 | 7.3 | 7.7 | 8.1 | 8.6 |
| Real GDP growth | 4.2 | 4.2 | 2.1 | (6.1) | 1.5 | 2.6 | 2.5 | 4.2 | 3.0 | 3.2 |
| Real GDP per capita growth | 3.8 | 3.9 | 1.8 | (6.3) | 1.3 | 2.5 | 2.4 | 4.1 | 2.9 | 3.1 |
