Credit rating agency Fitch has affirmed Thailand’s long-term foreign-currency issuer default rating (IDR) at BBB+ with a stable outlook.
The ratings agency said in its report that it forecasts real GDP growth of 3.7% in 2023 and 3.8% in 2024 for Thailand, up from 2.6% in 2022. It also said that expected economic prospects will be bolstered by an increasingly broad-based tourism revival from key source markets, alongside robust private consumption as the labor market recovers steadily amid policy settings that remain supportive. However, exports will continue to face headwinds, given subdued global demand and the lagged effect of monetary tightening in advanced economies.
Fitch nevertheless expressed optimism that international tourist arrivals will increase to about 29 million in 2023, from 11.2 million in 2022. It added that Thailand’s tourism recovery outlook has improved in light of China’s swift reopening. The agency stressed that Thailand’s resilient external position remains a core strength, providing a buffer against tight global financial conditions and geopolitical risks. Fitch forecasts a current-account surplus of 2.0% of GDP in 2023 and an increase to 3.9% in 2024, reversing average deficits of 2.8% for the past two years. This adjustment reflects its forecast of higher revenue from tourism and a decrease in terms-of-trade shock on falling oil prices.
Meanwhile, government debt is forecast to rise to 55.9% of GDP by the 2025 fiscal year, equal to the median for BBB category peers. The country’s headline inflation is forecasted to average 2.0%, compared to 6.1% in 2022 and within the Bank of Thailand’s 1.0 to 3% target band.
The rating agency also expressed concerns that lingering political uncertainty could affect the country’s near-term economic and fiscal policy outlook. Still, while the extended creation of a new administration may have an impact on effective policymaking, Fitch believes that such an outcome is unlikely to result in significant changes to the government’s key economic development strategy. (NNT)
