Economy Moody's Shifts Thailand's Economic Outlook to Negative Amid Rising Risks

[snoop1130]

File photo for reference only

 

Moody's Ratings has maintained Thailand’s Baa1 issuer and local currency ratings, but the economic outlook has shifted from stable to negative. This change highlights growing concerns over Thailand's economic and fiscal resilience, with Moody's expressing worry about slowing economic momentum and increased vulnerability to external shocks, exacerbated by shifting global trade dynamics.

 

Thailand's export-dependent economy is particularly sensitive to rising protectionism, especially following recent US tariffs and potential further trade restrictions. OECD data show that Thailand's value-added exports to the US accounted for approximately 3% of GDP in 2020, making the country particularly susceptible to these changes. Additionally, Thailand's role in regional supply chains means it faces indirect risks, particularly if US-China trade tensions lead to an influx of Chinese goods in Thai markets, hindering domestic production.

 

Investment sentiment has also been dampened, with historical data suggesting trade tensions discourage foreign direct investment (FDI). During the 2018–2019 US-China trade conflict, Thailand saw notable dips in FDI and capital investment. Further reduction in supply chain diversification, particularly under the “China+1” framework, could strain long-term capital flows.

 

Compounded by a recent earthquake in Myanmar, which has raised regional safety concerns, these issues could further impact Thailand’s critical tourism sector. Moody’s now projects Thailand’s real GDP growth to slow to around 2% in 2025, a downward revision from a previous forecast of 2.9%. This outlook reflects existing structural weaknesses, including a shrinking labour force and skill gaps. Reduced growth prospects threaten fiscal consolidation efforts, especially given Thailand's rising public debt, projected to reach approximately 56% of GDP in 2024.

 

 

 

Despite these challenges, Thailand’s Baa1 rating remains supported by sound macroeconomic management, robust domestic capital markets, and strong external buffers. Inflation is low, and interest payments are well contained. The country’s foreign exchange reserves amount to $215 billion, safeguarding against potential external financial shocks.

 

Moody’s cautions about long-term risks, citing Thailand’s ageing population and environmental vulnerabilities, such as flooding and agricultural stresses. Yet, the nation's strong governance and track record of macroeconomic stability lend significant resilience.

 

As Thailand navigates these challenges, Moody’s indicates a rating upgrade is unlikely in the short term given the negative outlook. Improved growth and fiscal metrics could stabilise the outlook, while persistent weak growth or political disruptions could lead to a downgrade.

 

  Adapted by ASEAN Now from The Nation 2025-04-30

 

 

[whiteman]

about time the sky may now fall in Thailand

[Gsxrnz]

Moody's were asleep at the wheel before the GFC. They would probably rate an overweight 46 year-old BG on Soi 6 as a solid 9.5 

[watchcat]

14 hours ago, whiteman said:

about time the sky may now fall in Thailand

 

Can't wait for it

[hotchilli]

15 hours ago, snoop1130 said:

This change highlights growing concerns over Thailand's economic and fiscal resilience, with Moody's expressing worry about slowing economic momentum and increased vulnerability to external shocks, exacerbated by shifting global trade dynamics.

Thailand with nothing much of it's own to offer and caught in the China trap...

[newbee2022]

It's a warning first.

But sure, we have to watch Trump and his tariffs on car parts carefully.

As an export nation Thailand depends on trades 

[jcmj]

From what I read it will either go up or down depending on certain factors. Cleared it up for me. 

[CallumWK]

6 minutes ago, jcmj said:

From what I read it will either go up or down depending on certain factors. Cleared it up for me. 

 

Moodys the weatherman? Today we will have sunshine all day, with rainshowers in between

[billd766]

3 hours ago, Gsxrnz said:

Moody's were asleep at the wheel before the GFC. They would probably rate an overweight 46 year-old BG on Soi 6 as a solid 9.5 

Thus speaks the worlds most experienced currency trader and financial expert, with no links and nothing to back what he says, as usual.

 

You must have far more experience than the whole of Moody's staff who do this for a living.

 

Out of curiosity, just what financial experience do you have?

[Guderian]

The outlook downgrade doesn't seem to have had much impact on the Baht so far, sadly.

[thecyclist]

4 hours ago, Gsxrnz said:

Moody's were asleep at the wheel before the GFC. They would probably rate an overweight 46 year-old BG on Soi 6 as a solid 9.5 

 

4 hours ago, Gsxrnz said:

Moody's were asleep at the wheel before the GFC. They would probably rate an overweight 46 year-old BG on Soi 6 as a solid 9.5 

46 year bar girl??  More like a 36 year old, that hasn't aged well ,very few of them do,  and looks 46. 

 

[SOTIRIOS]

...So, Soon, The 'Globalist' Organizations Will 'Come In & Rescue' Thailand/The Thai Economy...(?)

[JJ-Thailand]

Mismanagement?

[Jedi888]

On 4/30/2025 at 4:41 PM, snoop1130 said:

File photo for reference only

 

Moody's Ratings has maintained Thailand’s Baa1 issuer and local currency ratings, but the economic outlook has shifted from stable to negative. This change highlights growing concerns over Thailand's economic and fiscal resilience, with Moody's expressing worry about slowing economic momentum and increased vulnerability to external shocks, exacerbated by shifting global trade dynamics.

 

Thailand's export-dependent economy is particularly sensitive to rising protectionism, especially following recent US tariffs and potential further trade restrictions. OECD data show that Thailand's value-added exports to the US accounted for approximately 3% of GDP in 2020, making the country particularly susceptible to these changes. Additionally, Thailand's role in regional supply chains means it faces indirect risks, particularly if US-China trade tensions lead to an influx of Chinese goods in Thai markets, hindering domestic production.

 

Investment sentiment has also been dampened, with historical data suggesting trade tensions discourage foreign direct investment (FDI). During the 2018–2019 US-China trade conflict, Thailand saw notable dips in FDI and capital investment. Further reduction in supply chain diversification, particularly under the “China+1” framework, could strain long-term capital flows.

 

Compounded by a recent earthquake in Myanmar, which has raised regional safety concerns, these issues could further impact Thailand’s critical tourism sector. Moody’s now projects Thailand’s real GDP growth to slow to around 2% in 2025, a downward revision from a previous forecast of 2.9%. This outlook reflects existing structural weaknesses, including a shrinking labour force and skill gaps. Reduced growth prospects threaten fiscal consolidation efforts, especially given Thailand's rising public debt, projected to reach approximately 56% of GDP in 2024.

 

 

 

Despite these challenges, Thailand’s Baa1 rating remains supported by sound macroeconomic management, robust domestic capital markets, and strong external buffers. Inflation is low, and interest payments are well contained. The country’s foreign exchange reserves amount to $215 billion, safeguarding against potential external financial shocks.

 

Moody’s cautions about long-term risks, citing Thailand’s ageing population and environmental vulnerabilities, such as flooding and agricultural stresses. Yet, the nation's strong governance and track record of macroeconomic stability lend significant resilience.

 

As Thailand navigates these challenges, Moody’s indicates a rating upgrade is unlikely in the short term given the negative outlook. Improved growth and fiscal metrics could stabilise the outlook, while persistent weak growth or political disruptions could lead to a downgrade.

 

  Adapted by ASEAN Now from The Nation 2025-04-30

 

 

Moodys is being nice, and conservative on this one. When the trad deal is done with Trump within the next 2.5 months, that is the next SHOE TO DROP. We are on 90 day pause. Either Thailand opens up to US products fair, or faces reciprocity. No matter what, Thailand is going to eat it or eat something. If Th does not open up and follow Trumps rules, that second shoe is going to burn a hole in the Bahts pocket, exports etc. Moody's is not stupid, they see the writing on the wall. And so do I. We are in a domino fall now, it's just getting going...

[Harrisfan]

On 5/1/2025 at 2:04 PM, billd766 said:

Thus speaks the worlds most experienced currency trader and financial expert, with no links and nothing to back what he says, as usual.

 

You must have far more experience than the whole of Moody's staff who do this for a living.

 

Out of curiosity, just what financial experience do you have?

What does negative mean?

[Celsius]

This Moody's?

 

 

"Moody's was criticized for giving high credit ratings to mortgage-backed securities, including those with risky subprime loans, which inflated their perceived safety and led to widespread investment in these products. "

 

[ExpatOilWorker]

Same credit rating as Italy 🇮🇹. 

[sidneybear]

Moodys ratings ate like opinion polls: They are intended to shape opinion rather than measure it. Their predictions are never right.