Thailand's domestic developments may shape sovereign rating trend: S&P
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Thailand's domestic developments may shape sovereign rating trend: S&P Thailand may experience negative trends on its sovereign rating if escalation in political instability hinders its long-term economic competitiveness, said S&P Global Ratings report
The main uncertainty is when political normalisation will happen to allow policymakers to focus on issues that affect the long-term growth potential of the economy, said S&P Global Ratings analyst Kim Eng Tan.
"The current Thai government is pushing to adopt a new constitution that critics said would lead to unstable elected governments and weaken democracy," he said.
Continued political instability is damaging the economy's potential even as international competition intensifies with the rapid development of Vietnam and Myanmar's opening.
"A further slowdown in Thailand's economic growth trajectory could erode its sovereign credit metrics over the next few years even without a possible violent confrontation in the country," Tan said.
