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S&P affirms Thailand's ratings on strong external profile, liquidity

S&P Global Ratings affirmed the ratings of Thailand in view of the country's strong external profile, low government debt and credibility of monetary and fiscal policies.

The rating agency affirmed the BBB+ long-term and A-2 short-term foreign currency sovereign credit ratings, as well as its A- long-term and A-2 short-term local currency ratings. At the same time, S&P affirmed the axAA/axA-1 long- and short-term ASEAN regional scale ratings on Thailand.

The outlook on the long-term ratings is stable.

In addition to Thailand's strong external balance sheet and ample liquidity, the recent smooth succession of Crown Prince Maha Vajiralongkorn and referendum results restored stability, the rating agency said. The ratings strengths are weighed against the economy's relatively low-income level and the continued political uncertainty in the country.

The stable outlook reflects S&P's view that macroeconomic fundamentals are sufficient to counter the effects of uncertain political conditions over the next two years. S&P expects the country to preserve its external, fiscal and monetary strengths despite ongoing political uncertainty.

S&P may lower Thailand's ratings if political and institutional stability deteriorates beyond what the rating agency has observed in the past decade. A downgrade is also expected if the country's fiscal or economic indicators weaken significantly.

On the other hand, an achievement by the country's leaders of greater political harmony across the country's political spectrum could lead to an upgrade.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.