Connect with us
CGIF-10th-Year-Anniversary

Banking

Thailand not significantly exposed to BRI-related macro-stability risks

Avatar

Published

on

Moody’s Investors Service says that China’s (A1 stable) Belt and Road Initiative (BRI) — through investments in large transportation and energy projects — helps to expand productive capacity by closing critical infrastructure gaps.

BRI investments contribute to both near-term economic growth and long-run growth potential in recipient countries.

“However, inefficient project implementation, and the absence of macroeconomic and structural reform requirements in many Chinese loans can lessen longer-term credit benefits for some sovereigns,” says William Foster, a Moody’s Vice President and Senior Credit Officer.

“Meanwhile, the scale and terms of BRI investment can amplify macro-stability risks for sovereigns with weaker economic fundamentals and limited policy effectiveness,”


William Foster, a Moody’s Vice President and Senior Credit Officer.

In a new report, Moody’s focuses on the potential long-run economic gains and near- to medium- term macro-stability risks for 12 emerging and frontier countries in South Asia, Southeast Asia and Central Asia/CIS.

Pakistan, Mongolia, Kazakhstan and Cambodia seen reaping the greatest potential

The countries are Pakistan (B3 negative), Sri Lanka (B2 stable), the Maldives (B2 negative), Cambodia (B2 stable), Vietnam (Ba3 stable), Thailand (Baa1 stable), Malaysia (A3 stable), Mongolia (B3 stable), Kazakhstan (Baa3 stable), Tajikistan (B3 negative), the Kyrgyz Republic (B2 stable), and Georgia (Ba2 stable).

Among these countries, Moody’s sees Pakistan, Mongolia, Kazakhstan and Cambodia as reaping the greatest potential for economic gains.

Moody’s notes that bilateral lending from China comprises much of the financing for BRI projects and the scale – relative to the size of the host economy, the terms of lending, and the recipient, whether a government or private sector entity – varies considerably among sovereigns.

For countries with weaker fiscal and external positions and large volumes of non-concessional funding, BRI project financing tends to exacerbate debt sustainability and balance of payments pressures.

In this context, Moody’s sees the Maldives, Pakistan and Sri Lanka as the sovereigns at greatest risk from rising debt and widening external imbalances in part related to the BRI.

Conversely, Kazakhstan, Vietnam and Thailand are not significantly exposed to potential BRI-related macro-stability risks, due to generally stronger sovereign credit profiles or the smaller relative scale of their projects.


Comments

Banking

Thailand’s Public debt to GDP ratio within framework says Finance Minister

Currently, Thailand’s ratio of public debt to gross domestic product (GDP) stands at 49.34 percent, which is below the Fiscal Sustainability Framework set at 60 percent.

National News Bureau of Thailand

Published

on

BANGKOK (NNT) – The Thai economy is gradually recovering, with monthly economic indicators, such as the consumer confidence index and domestic spending, showing positive signs.

(more…)
Continue Reading

Banking

Raising inequality posing credit risks for sovereign in APAC countries

Governments with weaker social protection systems and tighter fiscal positions will face tougher challenges in tackling income inequality

Pr News

Published

on

By

Moody’s Investors Service says in a new report that the impact of the coronavirus pandemic will exacerbate income inequality in APAC, posing credit risk for sovereigns across the region and in particular for those with weaker fiscal capacity and social protection systems.

(more…)
Continue Reading

Banking

Bank of Thailand steps in to curb recent baht strength

Bank of Thailand accelerates measures to advance the development of the new Thai FX Ecosystem and to limit excessive currency volatilities

Olivier Languepin

Published

on

In a press release published on the 20th of November, the central bank’s Monetary Policy Committee (MPC) has expressed concerns over the rapid appreciation of the baht as this affects the fragile economic recovery.

(more…)
Continue Reading
Advertisement

Latest

Most Viewed

Subscribe via Email

Enter your email address to subscribe and receive notifications of new posts by email.

Join 13,431 other subscribers

Trending