Vorapak responds to Fitch’s negative outlook on Thailand, emphasises fiscal discipline
Thai government committed to fiscal discipline, says Vorapak, in response to Fitch’s negative outlook due to rising debt, political uncertainty, and slow growth.
Deputy Finance Minister Vorapak Tanyawong on Thursday addressed the recent Fitch Ratings downgrade of Thailand’s credit outlook from 'Stable' to 'Negative', while maintaining the country’s BBB+ credit rating. He stated that the primary reasons for the downgrade were not solely economic figures, but concerns over fiscal and political stability.
Vorapak explained that Fitch identified three key risks that threaten Thailand’s credibility:
- Rising public debt – Thailand’s public debt has risen sharply from around 35-36% of GDP before COVID-19 to approximately 61% now. It is expected to reach 65% in the coming years unless strict measures are taken to control the deficit.
- Political uncertainty – The transition of government and risks surrounding the upcoming elections have led Fitch to worry that Thailand’s Medium-Term Fiscal Strategy may lack continuity and clarity.
- Low economic growth – The projected GDP growth for next year is just 2.2%, pressured by a 19% US tariff on exports and slower-than-expected recovery in the tourism sector, particularly with the Chinese market not fully rebounding.
New government to tighten fiscal policy
Despite the new government only being in power, Vorapak assured that they would not ignore these warning signs. The government has already begun planning fiscal consolidation measures to return public finances to a sustainable path.
In November 2025, the government will introduce the Medium-Term Fiscal Framework (MTFF) for the first time, outlining clear steps to reduce the deficit and prevent further increases in public debt. The key objective of the plan is to gradually reduce the deficit after the 2026 fiscal year and stabilise the debt-to-GDP ratio below 65%, while boosting government revenue and maintaining disciplined expenditure.
‘Negative’ is a warning, not a crisis
Vorapak concluded that the ‘Negative’ outlook from Fitch does not signal an imminent crisis for Thailand, but rather a ‘warning’ that without clear fiscal plans, confidence in the country’s economy will likely erode. He stressed that addressing this challenge is a priority for the government in the coming months, to reassure investors and markets that Thailand can maintain fiscal discipline and economic credibility.
