S&P notes Kingdom’s strong fundamentals amid political uncertainty

The outlook on the long-term ratings is “stable”.
S&P also affirmed the “axAA/axA-1” long- and short-term Asean regional scale ratings on Thailand. Its transfer and convertibility (T&C) assessment remains “A”.
Thailand’s strong external balance sheet and liquidity, a modest level of government debt, and a history of effective monetary and fiscal policies support the rating, the agency said. These strengths are weighed against the economy’s relatively low income level and the country’s continued political uncertainty.
S&P expects Thailand’s external liquidity indicators to remain strong. Gross external financing needs are likely to stay around 68 per cent of current-account receipts plus usable reserves over 2016-2019. 
The export sector has suffered from negative terms of trade while undergoing structural adjustments to its manufactured-goods profile. Of late, however, the sector has benefited from low oil prices and a weaker exchange rate.
S&P forecasts the current account to rebound to surplus levels averaging 11 per cent of gross domestic product over 2017-2019.
S&P also projects real GDP growth to remain at a subdued 3 per cent annually over the next three years. Per capita GDP is estimated at just under US$6,000 in 2016, lower than most peers in the same rating category. 
S&P envisages Thailand’s economic performance to remain relatively subdued and provide little support for meaningful sovereign credit metric improvements.
The “stable” outlook signals that S&P sees a less than one-in-three probability that it will change its rating on Thailand in the next two years. 
“We believe Thailand will be able to preserve its external, fiscal, and monetary strengths despite ongoing political uncertainty. We may lower the ratings, however, if political and institutional stability deteriorates beyond what we have observed in the past decade. 
“We may also lower the ratings if the country’s fiscal or economic indicators weaken significantly,” S&P said.