R&I Upgrades Thailand’s Credit Rating to “A-”

Mrs. Patricia Mongkhonvanit, Director-General of the Public Debt Management Office (PDMO), announced that Japan’s Rating and Investment Information, Inc. (R&I) upgraded the Kingdom of Thailand Issuer Credit Rating from “BBB+” to “A-” and affirmed a Stable Rating Outlook on Thursday 31^st October 2019. In this regard, R&I provided 4 supporting reasons for this credit rating upgrade as follows:

1. Thai government profoundly commits to proactive measures for the development of high value-added industries and the Eastern Economic Corridor (EEC) as well as ongoing infrastructure investment projects to stimulate the economy and drive through domestic and foreign direct investment. This is essential to boosting growth of Thailand’s economy towards moving out of the middle income trap.

2. Thailand’s current account remains substantially in surplus relative to GDP due to a recovery in trade surpluses as well as increase in service surpluses, which mainly stems from strong tourism revenues. Given ample foreign reserves relative to external debt, foreign currency liquidity is of little concern.

3. The enforcement of Fiscal Responsibility Act, B.E. 2561 makes fiscal management more efficient and concrete. With outstanding debt staying relatively low as a percentage of GDP and in line with prudent public debt ceiling, there is no particular concern about funding as well as fiscal risk.

4. The political stability in Thailand is enhanced mainly from the official elected government, resulting in continuous economic policies. In this regard, R&I will continue to monitor issues relating to politics, income distribution structure between urban and rural areas, and other political environments that will support the government's economic measures in the future.

 Director-General of PDMO added that "In 2019, Thailand has been raised by several credit rating agencies. In July, Moody's and Fitch Rating just upgraded their Rating Outlook for Thailand from "Stable" to "Positive". These upgrades would strengthen domestic and foreign investors’ confidence in Thailand, allowing government and private companies to raise funds at lower cost.”

R&I has been providing credit ratings for Thailand since 1987. Their methodology is based on 5 factors including fiscal conditions, funding structure, economic fundamentals, social-political fundamentals, and policy management capacity.