BANGKOK, April 21 (Xinhua) -- Global rating agency Moody's upgraded Thailand's credit outlook to "stable" from "negative" on Tuesday, citing lower downside risks from external shocks and domestic political uncertainty, while keeping its sovereign rating at Baa1.
The upward revision reflected that downside risks from a severe and prolonged tariff shock have subsided after U.S. duties on Thai exports were reduced to levels comparable to regional peers, Moody's said in a statement.
It said that while higher oil prices linked to tensions in the Middle East could weigh on growth and increase the government's debt burden, Thailand's exposure to these risks remains comparable to that of similarly rated economies.
The assessment also revealed improving investment momentum, which has lowered the risks of material and sustained declines in the Southeast Asian country's growth trends over the long term.
Moody's noted that a nascent recovery in private investment would support stronger, longer-term growth and improve fiscal dynamics over time, with near-term activity already benefiting from an ongoing investment upturn.
It added that the formation of a governing coalition led by Thai Prime Minister Anutin Charnvirakul with a sizable parliamentary majority following the recent elections has lowered the risk of significant political instability and increased the likelihood of reform implementation.
The decision to affirm the Baa1 rating was based on Thailand's robust external position and favorable debt affordability, despite a continued decline in longer-term potential growth and an increasing government debt burden over the next few years, Moody's said.
Moody's projects Thailand's real gross domestic product growth at about 1.5 percent in 2026 and 2.2 percent in 2027.
The subdued growth is attributed to the impact of higher global oil prices linked to the Middle East conflict and persistent structural weaknesses, including rapid population aging, high household debt, and chronically low investment, the rating agency said. ■
