Despite martial law, S&P holds Thai ratings, says outlook stable

SINGAPORE - Standard & Poor's today  re-affirmed its 'BBB+' long-term and 'A-2' short-term foreign currency sovereign credit ratings, and its 'A-' long-term and 'A-2' short-term local currency ratings on Thailand, and said the outlook on the long-term ratings is stable. S&P also affirmed the 'axAA/axA-1' long- and short-term ASEAN regional scale ratings on Thailand. “Our transfer and convertibility (T&C) assessment remains 'A'.”

The ratings agency said Thailand's strong external profile, modest Government debt, and a track record of effective monetary policy are factors that support the rating. However, ongoing political instability and its relatively low-income economy constrain the ratings

“The growing political instability over the past half a year has taken a toll on consumption and investment, depressing near-term growth prospects,” S&P said. “We project Thailand's per capita GDP at US$5,700 in 2014. This income level is a key credit constraint, and will remain so in the medium term even when growth returns to its trend rate as political conditions normalise.

“Besides Thailand's income level, the country's infrastructure, health, and education indicators are also more closely associated with sovereigns in lower rating categories.” www.standardandpoors,com (ATI).