Japanese agency upholds kingdom's credit ratings
Japan Credit Rating Agency has affirmed Thailand's sovereign creditworthiness and declared the outlook stable, while it will closely monitor political developments and threats of more flooding.
The rating affirmation comes as the government and Opposition are in the midst of a heated debate on the national reconciliation plan.
Chakkrit Parapuntakul, director-general of the Public Debt Management Office, said yesterday that the agency had affirmed foreign-currency long-term debts at “A-” and domestic-currency long-term debts at “A”.
The agency noted that the Thai economy was supported by exports. It also said the economy had been underpinned by a stable banking sector, a relatively sound fiscal status and a low level of foreign debt.
The rating agency projected that gross domestic product would expand by about 4 per cent this year after it grew only 0.1 per cent last year because of the severe impact of floods.
The country’s fiscal and public-debt position currently is comparatively sound but it might be weakened by more spending on flood prevention, said the agency, adding that it would monitor future developments.
The agency expressed concern over political and social conflicts in Thailand. It said that though the country had achieved stability after last year’s general election, the deep and complicated fundamentals of political and social conflicts remained. The agency will closely monitor the situation in terms of its impact on the economy.
Foreign direct investment, particularly in automobiles and electronics, has contributed to the economic recovery after the flood disaster. Export of goods and services is worth 75.5 per cent of GDP, so the Thai economy depends largely on export demand.
Tourists still see Thailand as an attractive destination, as last year the number of arrivals exceeded 19 million, the highest ever, despite the severe flooding in the final quarter, said the agency.
