5 Key Factors That Will Determine Thailand's Credit Rating
Thailand's economic confidence is entering a critical test in 2026, as three global credit rating agencies – Moody’s, Fitch Ratings, and S&P – are set to assess the country’s fiscal and macroeconomic status
- In 2026, three credit rating agencies will assess Thailand’s economy, an important evaluation after Moody’s and Fitch downgraded their outlook to "negative" last year.
- The five key factors that will determine Thailand's credit rating include political stability, fiscal discipline, GDP growth, handling of an aging population, and promoting innovation industries.
- Political stability and continuity of government policies are seen as the most important factor that foreign investors are focusing on.
- Maintaining fiscal discipline with a goal of reducing the budget deficit to 3% of GDP by 2030 is essential for controlling public debt.
Jindarat Viriyataveekul, Director of the Public Debt Management Office (PDMO), revealed that the important timeline begins with Moody’s, which is expected to announce its result between March and April 2026, although it may be delayed until September to await clarity from the new government. Fitch and S&P will follow in the second half of the year, between August and September.
This assessment is crucial for the country’s financial costs, as both Moody’s and Fitch downgraded Thailand’s credit outlook to "negative" in 2025. S&P, however, maintained a "stable" outlook.
As a result, 2026 is seen as a pivotal year for Thailand to prove its ability to avoid a "downgrade" from its current Baa1 and BBB+ rating levels.
5 Key Factors Deciding Thailand’s Credit Fate
The PDMO highlighted that the credit rating agencies will focus on five key factors, which serve as indicators of the country’s survival and credibility in the eyes of global investors:
1. Political Stability and Policy Continuity
This factor is considered the most critical by foreign investors. The PDMO believes that having an existing government with continuity after the election will positively influence confidence and ensure that the economic machinery does not stall.
2. Medium-Term Fiscal Discipline
The key focus here is the government’s clear plan to reduce the budget deficit, with a target of lowering the deficit from over 4% to 3% of GDP by 2030. This is crucial for controlling the growth of public debt.
3. GDP Growth Drivers
The recovery of Thailand’s economy amid global economic volatility is essential. If GDP growth is lower than expected, it will become a weakness and could lead to a rating downgrade.
4. Aging Population and Demographic Structure
Thailand faces a challenging issue with its aging population, which will directly affect its competitiveness and future welfare budget burdens. A concrete plan to address this issue is crucial.
5. Innovation Industries and Green Finance
The development of targeted industries (New S-Curve) and the use of new financial instruments, such as Blue Bonds and Green Bonds, are essential to attracting high-quality investments.
Jindarat emphasized that the government’s direction in economic structural reform and its clear strategy to reduce the fiscal deficit will be the main reasons for a positive view from credit rating agencies. If the government’s performance aligns with the plan, it could help restore Thailand’s outlook to stable.
