Fitch Ratings has reaffirmed Thailand’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘BBB+’ with a Stable Outlook. The ratings are based on Thailand’s strong external finances and solid macroeconomic policy framework, though it has weaker structural features compared to its peers. Fitch predicts Thailand’s GDP growth to increase to 3.8% in 2024, aided by a rebound in tourism, export momentum, and higher domestic demand. The formation of a coalition government is anticipated to reduce near-term political uncertainty, despite concerns about the financing of spending pledges.
Thailand’s public finances have deteriorated, with wider deficits and a higher debt ratio forecasted. However, the country’s strong external position and access to deep domestic capital markets provide a buffer against risks. The high level of household debt poses potential challenges for banks, though. The ESG Relevance Scores reflect Thailand’s political stability, rule of law, institutional quality, control of corruption, and human rights. Negative rating action may occur if public finances worsen or political disruptions impact economic policymaking, while positive rating action could result from improved growth prospects and declining government debt.