# Moody’s Ratings upholds Thailand’s Baa1 rating and maintains a stable outlook

- Link: https://www.thailand-business-news.com/banking/135578-moodys-ratings-upholds-thailands-baa1-rating-and-maintains-a-stable-outlook
- Published: 2024-04-11T18:05:00+07:00
- Author: News Desk

Singapore, April 11, 2024 — Moody’s Ratings has today affirmed the Government of
Thailand’s Baa1 issuer and local currency senior unsecured ratings and maintained
the stable outlook. Moody’s Ratings has also affirmed Thailand’s foreign currency
commercial paper rating at P-2.

## Key Takeaways

 * Moody’s Ratings affirmed Thailand’s Baa1 rating with a stable outlook, citing
   expectations of stabilizing government debt and strong debt affordability.
 * Thailand’s economic recovery is expected to continue, supported by growth in 
   the tourism sector, goods exports, and public investment.
 * Political risks, rapid population ageing, and sluggish investments continue to
   constrain Thailand’s rating, with balanced risks to its credit profile.
 * The country’s local and foreign currency country ceilings remain unchanged at
   Aa3 and A1, respectively, with considerations for external balances, effective
   institutions, and potential capital controls.

The affirmation of Thailand’s Baa1 rating reflects Moody’s Ratings expectation that
the government will stabilize its debt burden over the medium term, at levels that
are higher than pre-pandemic but comparable to similarly rated peers.

ADVERTISEMENT

**The country’s deep domestic capital markets which allow the government to borrow
at low costs and a favourable debt structure support debt affordability**. Moreover,
Thailand’s large and moderately diverse economy, as well as its strong macroeconomic
policy effectiveness also support its rating at Baa1. The rating also takes into
account material downward pressure on the economy’s growth potential from rapid 
population ageing, while investments have been sluggish limiting potential for stronger
productivity growth over the near to medium term. Polarisation and its associated
political risks continue to constrain the rating by constraining progress on significant
reforms and fueling uncertainty which hampers investment.

### Related**Posts**

###  󠀁[USD to THB Exchange Rate Today: Thai Baht Moves with Global Market Trends](https://www.thailand-business-news.com/banking/331689-usd-to-thb-exchange-rate-today-thai-baht-moves-with-global-market-trends)󠁿

###  󠀁[Bank of Thailand Unveils Framework to Shield Financial Sector from Illicit Activities](https://www.thailand-business-news.com/banking/328409-bank-of-thailand-unveils-framework-to-shield-financial-sector-from-illicit-activities)󠁿

###  󠀁[Tokenised Deposits vs Stablecoins: Why Thailand’s Cautious Path Differs from Hong Kong and Singapore](https://www.thailand-business-news.com/banking/321239-tokenised-deposits-vs-stablecoins-why-thailands-cautious-path-differs-from-hong-kong-and-singapore)󠁿

###  󠀁[Thailand’s economy in July saw growth, boosted by the momentum of the global technology and AI cycle](https://www.thailand-business-news.com/banking/326128-the-thai-economy-in-july-expanded-from-the-previous-month)󠁿

## Stable outlook indicates balanced risks to Thailand’s credit profile

Thailand’s economic strength may benefit from productivity gains, including through
the ramp-up of the Eastern Economic Corridor to a greater extent than Moody’s Ratings
currently expects. Conversely, downside risks stem from potential material delays
to fiscal consolidation, leading to continued increases in the government debt burden
over the medium term. Thailand’s economic and fiscal strength may also weaken beyond
Moody’s Ratings expectations due to more significant erosion of the economy’s potential,
and/or greater fiscal costs of population ageing than Moody’s Ratings assumes.

Thailand’s local and foreign currency country ceilings remain unchanged at Aa3 and
A1, respectively. The four-notch gap between the local currency ceiling and sovereign
rating reflects a balance between the country’s strong external balances and effective
institutions, against the government’s relatively large footprint in the economy
and moderate political risks. The one notch gap between the foreign currency ceiling
and the local currency ceiling takes into account Thailand’s history of imposing
capital controls, although its low external indebtedness and high policy effectiveness
reduce the risks of potential transfer and convertibility restrictions in very low-
probability scenarios of the government seeing a need to impose them.