JCR Maintains Thailand’s Credit-rating Ceiling at “A-”

[webfact]

 

By Paphamon Arayasukawat

   

BANGKOK (NNT) - The Finance Ministry has reported on Monday that the Japan Credit Rating (JCR) Agency has maintained Thailand’s credit-rating ceiling at “A-” with a “stable” outlook.

 

Public Debt Management Office (PDMO) Director-General Patricia Mongkhonvanit said the rating remained stable despite the serious impact of Covid-19 on the Thai economy, especially exports and tourism.

 

She said the rating for Thailand stayed level because the government had launched a THB1.9-trillion rescue package, boosting economic recovery since the second quarter of 2020. JCR also projects Thai GDP will recover from a 6-per-cent drop last year to grow 3 per cent this year.

 

JCR said it remained confident that the Thai government would be able to maintain fiscal stability and manage public debt at an appropriate level. As Thailand’s banking sector also remained stable while trade is strong with a current account surplus and high international reserves, the country still has capacity to take further measures to cope with any unexpected future situations.

 

-- © Copyright NNT 2021-04-28

 

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[ThailandRyan]

4 hours ago, webfact said:

JCR also projects Thai GDP will recover from a 6-per-cent drop last year to grow 3 per cent this year.

Wow, another clairvoyant projections for a rosy outlook.  Guess they haven't looked at the recent downturns and lower than expected growth by the BOT and many others.  Slow on the uptake, but trying to create a rosy picture in light of the truth.

[Boomer6969]

Great, I can now move what's left from my savings in Switzerland to Thailand..

[Cake Monster]

37 minutes ago, ThailandRyan said:

Wow, another clairvoyant projections for a rosy outlook.  Guess they haven't looked at the recent downturns and lower than expected growth by the BOT and many others.  Slow on the uptake, but trying to create a rosy picture in light of the truth.

But Exports did increase by 6.5 % last Month, and car sales have jumped 25 %

Two small glimmers of hope maybe in a Sea of Mud.

But this is only a relatively small Credit Reference Agency, and it will be interesting to see what the big 3 that matter  ( Moodys, S & P , and Fitch ) project for the future

[Brierley]

51 minutes ago, ThailandRyan said:

Wow, another clairvoyant projections for a rosy outlook.  Guess they haven't looked at the recent downturns and lower than expected growth by the BOT and many others.  Slow on the uptake, but trying to create a rosy picture in light of the truth.

I don't think you understand the picture TR, the PDMO isn't painting a different picture to anyone else. They acknowledge the -6% drop last year and are suggesting there will be a small increase in growth this year, in line with the global recovery and we've already seen evidence of that in the form of record exports and increased car sales. It's not a rosy picture but also not the massive distortion of truth that you seem to hint at.

[J Town]

Considering all the reports I've read of the staggering domestic household debt, and all the condos being built with absolutely no hope of sales or rent for the foreseeable future, I'd suggest this is a "rose-colored glasses" prediction.

[Brierley]

2 minutes ago, J Town said:

Considering all the reports I've read of the staggering domestic household debt, and all the condos being built with absolutely no hope of sales or rent for the foreseeable future, I'd suggest this is a "rose-colored glasses" prediction.

Household debt and the over supply of condo's aren't factors that impact on the strength or weakness of the economy as far as rating agencies are concerned, they are all private consumption factors. The rating agencies look at the credit worthiness and the ability of the country to pay its debts....the amount of public government (public) on the books, the status of the current account, balance of payments, foreign currency reserves. They also look at political stability and monetary policy.

[J Town]

1 hour ago, Brierley said:

Household debt and the over supply of condo's aren't factors that impact on the strength or weakness of the economy as far as rating agencies are concerned <snip>

You really think they don't take these factors into consideration?

[Brierley]

1 hour ago, J Town said:

You really think they don't take these factors into consideration?

Yes. They are a credit rating agency, their purpose is to rate the credit of the country and consumer debt is not something that influences that.

[Pilotman]

yes, a credit agency, one of those organisations that failed to assess and predict the Asian economic crisis in 1997, the economic downturn of 2008, the failure of the Greek economy, the several defaults by Argentina, the economic collapse of Venezuela .  Very useful  then. 

Edited April 28, 2021 by Pilotman

[Brierley]

49 minutes ago, Pilotman said:

yes, a credit agency, one of those organisations that failed to assess and predict the Asian economic crisis in 1997, the economic downturn of 2008, the failure of the Greek economy, the several defaults by Argentina, the economic collapse of Venezuela .  Very useful  then. 

It goes deeper than that. Not only did they not predict or forewarn, when they did finally understand they made the problem far worse than it should have been.

 

"In fact, having failed to predict the emergence of the crisis, rating agencies became excessively conservative. They downgraded East Asian crisis countries more than the worsening in these countries' economic fundamentals would justify. This unduly exacerbated, for these countries, the cost of borrowing abroad and caused the supply of international capital to them to evaporate. In turn, lower than deserved ratings contributed ± at least for some time ± to amplify the East Asian crisis. Although this goes beyond the scope of our paper, we also propose an endogenous rationale for rating agencies to become excessively conservative after having made blatant errors in predicting the East Asian crisis. Speci®cally, rating agencies would have an incentive to become more conservative, so as to recover from the damage these errors caused to them and to rebuild their own reputation."

 

 https://core.ac.uk/download/pdf/161443652.pdf