Moody’s report reveals the factors that could lift or cut Thailand’s rating
Moody’s stable outlook for Thailand has improved sentiment, but the next rating move will depend on stronger growth, structural reform and tighter control of public debt.
A closer reading of the latest Moody’s Ratings report, after the agency revised Thailand’s outlook to stable, shows the key conditions that will determine whether the country is eventually upgraded or downgraded in the period ahead.
Moody’s raised Thailand’s credit outlook from negative to stable and affirmed the sovereign rating at Baa1 on April 21, 2026. However, the report also set out several critical conditions that both the government and investors will need to monitor closely, as these will shape the next direction of Thailand’s credit rating.
For Thailand to be considered for an upgrade, Moody’s said the country would need to deliver a clear and sustained improvement in its economic growth outlook, while also steadily reducing the government’s public debt burden.
The key driver behind such an improvement, the agency said, would be meaningful progress in structural economic and fiscal reform. These reforms would also need to be backed by a stable political environment in order to strengthen Thailand’s long-term growth potential and improve the government’s ability to raise revenue over time.
On the other hand, Thailand still faces a number of challenges that could lead Moody’s to consider a downgrade. These include the risk that the country’s growth outlook and fiscal position could weaken more significantly than expected, or that Thailand’s credit metrics could deteriorate to a level materially worse than those of other countries in the same rating category.
Moody’s also warned that persistent delays in addressing Thailand’s structural weaknesses, combined with severe external shocks that hit Thailand harder than its regional peers, could weigh on the rating.
Looking at the current context, although Moody’s sees reduced risks from US tariff issues and recognises improved political stability after the election, Thailand still faces the challenge of weak economic growth. The agency forecasts Thai GDP growth of only 1.5% in 2026, rising modestly to 2.2% in 2027.
At the same time, the public debt burden is expected to keep rising amid a subdued economy and the absence of significant new revenue-raising measures.
Moody’s estimates that government debt will climb to 60% of GDP in fiscal 2026 and rise further to 62% in 2028, a level it considers weaker than that of countries with the same rating.
From here, the direction of Thailand’s economy will depend heavily on the government’s ability and vision in pushing ahead with policies that can both reduce debt and create stronger, more sustainable growth in real terms.
