R&I Affirms Thailand’s ‘A-’ Rating as Fiscal Buffers Weather Global Energy Storm
Japan’s leading credit agency maintains a stable outlook for Thailand, praising the ‘Thailand 10 Plus’ strategy and robust international reserves
- Japan's R&I has reaffirmed Thailand's sovereign credit rating at 'A-' with a 'Stable' outlook, citing the country's fiscal resilience.
- The positive rating is supported by strong fiscal buffers, including robust international reserves, a current account surplus, and a low-risk public debt structure that is primarily held domestically.
- The "Thailand 10 Plus" strategy, which targets investment in high-tech sectors like AI and EVs, was highlighted as a key driver for future economic growth.
- Despite the affirmation, the rating agency noted challenges from Thailand's high dependency on energy imports, which, combined with high household debt, pressures the budget and constrains growth.
Japan’s leading credit agency maintains a stable outlook for Thailand, praising the ‘Thailand 10 Plus’ strategy and robust international reserves.
Japan’s Rating and Investment Information (R&I) has reaffirmed Thailand’s credit rating at 'A-' with a 'Stable' outlook, providing a vote of confidence in the kingdom’s fiscal resilience despite a volatile global energy market.
The affirmation was welcomed by Ekniti Nitithanprapas, Deputy Prime Minister and Minister of Finance, who stated that the rating reflects international trust in the government’s economic restructuring.
R&I specifically highlighted the "Thailand 10 Plus" policy—a strategic framework targeting investment in high-tech sectors like Artificial Intelligence (AI) and Electric Vehicles (EV)—as a vital engine for future growth.
Internal Strength Amid External Headwinds
Central to R&I’s assessment is Thailand’s formidable external position. The agency noted that the country’s international reserves remain robust, and its current account continues to post a surplus, bolstered by a resilient manufacturing sector and a recovering tourism industry.
Furthermore, R&I expressed little concern regarding government financing. Although the public debt-to-GDP ratio rose to 64.7% following the pandemic, the agency noted that Thailand’s debt structure is predominantly domestic.
Being denominated in Thai Baht and held by local investors, the debt carries significantly lower risk compared to foreign-denominated liabilities.
The Shadow of the Energy Crisis
Despite the positive rating, the report did not shy away from the challenges posed by the ongoing Middle East conflict.
With Thailand importing nearly 60% of its crude oil and petroleum products from the region, surging energy prices have placed immense pressure on both the fiscal budget and household spending.
R&I warned that high household debt—currently hovering near 90% of GDP—coupled with an ageing population, continues to dampen domestic consumption. Consequently, real GDP growth for 2026 is projected at a modest 1.5% to 1.6%, trailing behind several Southeast Asian peers.
Strategic Evolution and Fiscal Discipline
The government remains committed to its Medium-Term Fiscal Framework, which aims to narrow the budget deficit to below 3% by 2029.
However, the agency suggested that should energy volatility persist, the government may eventually need to consider politically sensitive reforms, such as restructuring the Fuel Fund or revisiting Value Added Tax (VAT) rates.
Minister Ekniti clarified that there are currently no plans to increase taxes emphasising that the government’s priority is to shield citizens from the rising cost of living while maintaining economic stability.
"This rating affirmation proves that our roadmap for economic transformation and fiscal management is on the right track," Ekniti concluded. "We are successfully navigating regional risks to ensure long-term prosperity."
