Thai Govt Pushing For Boost: Sovereign Credit Rating

[webfact]

SOVEREIGN CREDIT RATING

Govt pushing for boost

ACHARA DEBOONME

THE NATION

BANGKOK: -- The Pheu Thai-led government is hopeful of an upgrade in Thailand's sovereign credit rating, believing the economy has apparently sailed through the global economic crisis and political stability has returned to some extent.

Deputy Prime Minister Kittiratt Na-Ranong said the Fiscal Policy Office and Public Debt Management Office would update credit agencies on the Kingdom's status, seeking a revision in the sovereign rating.

'THAI ECONOMY SOLID'

"The sovereign rating has not been an issue for some time as the government rarely borrows from overseas lenders. But the sovereign rating is important, as it reflects on corporate funding costs. Credit rating agencies should be updated that the Thai economy is solid and there is a chance for an upgrade," he said.

Thailand's sovereign credit ratings were downgraded in 2009 following political instability, which had led to the closure of Suvarnabhumi Airport in 2008 and resulted in riots in subsequent years.

The Thai government's positive move bucks a global trend, as all countries are expected to be directly or indirectly hit by the global crisis - triggered chiefly by the euro-zone debt crisis and the US fiscal "cliff" - a large predicted reduction in the US budget deficit and possible resulting slowdown of the economy.

Still, Asia, particularly Southeast Asia, has so far been recognised for its resilience to the intensifying crisis in the euro area. Standard & Poor's Ratings Services this year raised the sovereign rating of the Philippines to "BB" on rising fiscal flexibility and of Korea to "A+/AA-" on reduced geopolitical risks. S&P maintains Thailand's sovereign rating at "BBB+".

'POLITICAL INSTABILITY HIGH'

In Bangkok in March, S&P analytical manager for sovereign ratings in Asia Pacific Tan Kim Eng noted that Thailand's government debt is essentially lower than that of other countries in the same category. But political instability remains high, which poses problems for public investment projects.

'BAA1' AND 'BBB' RATING

Moody's Investors Service and Fitch Ratings maintained Thailand's ratings at "Baa1" and "BBB", respectively.

S&P said in a statement yesterday that the euro situation remains a big threat to the sovereign ratings of Asia Pacific countries in the coming months. Negative action could be taken on India's rating, and it did not expect any positive trend in the past six months to continue in the coming 12-18 months. Economic conditions in the developed world and elsewhere remain weak and uncertain. Where credit metrics are already weak in their rating categories, policy mistakes or hesitancy could drag sovereign ratings down, Tan said.

DOWNSIDE RISKS FOR THAILAND

At the Fitch Ratings Annual Conference 2012 on "Global Risks and the Outlook for Thailand", David Riley, managing director of Fitch Ratings and head of global sovereigns and supranationals, commented that the euro situation, fiscal deficits in the US, and China's economic slowdown will be three major downside risks for Asia including Thailand. Yet, he added that with strong fundamentals - public debt at a controllable level, a strong financial sector and robust domestic demand - Thailand has ample room to absorb external shocks. Fitch still maintains its forecast that Thailand’s economy will expand 5.5 per cent this year, against 5.6 per cent forecast by the International Monetary Fund and 4.5-5.5 per cent by Thai government agencies.

Among countries in the "BBB" category, Thailand performs better than its peers in the areas of public debt, net external debt and budget deficit. Still, against a political stability median of 48.1, Thailand's score is 12.7.

"Thailand has a very strong external balance sheet, which will shield it from global shocks. Though, it's not immune to global downturn," Riley said, adding that it would take a number of years to clear the euro-related storms that have put the global economy at great risk.

-- The Nation 2012-10-11

[noitom]

Why should anyone believe that Thailand's credit rating should be raised? The Thai economy is largely based on exports that will be slowing down substantially more than any Thai source wishes to reveal. The rest of Thailand, the domestic economy, is largely black, under the table, "off the books," and totally dependent on a system of bribery, corruption, and illegal activity as well as prostitution and sex trade. Not things that you would want to pin the hopes for a higher world credit rating on.

In addition, the Thai business markets are totally opaque. There is no such thing as transparency. Most major businesses in Thailand are family owned even though they are supposedly "publicly traded." They are rife with nepotism and cronyism. Can you imagine the chicanery and manipulation in the Thai securities markets given what we know about Thailand and its lack of transparency and accounting? I mean real accounting and standards, not the Thai style manipulative type. Think about the manipulation of the law by "privileged" elite class folks. Now apply the lack of law and order, rampant bribery, and corruption, sex trade, illegal copying, "black economy," reneging on "business arrangements," and think through clearly whether you would raise the credit rating?

[Thai at Heart]

The white lie man is hoping for an uptick in Thailand s rating.

Ooooh, the irony.

[asiawatcher]

If the massive drop of rice exports (from 40-100% down) is any indication from yesterdays posts, the country needs further downgrading, urgently rather than the lame ministry of finance trying to talk up credibility.

[davejones]

Why should anyone believe that Thailand's credit rating should be raised? The Thai economy is largely based on exports that will be slowing down substantially more than any Thai source wishes to reveal. The rest of Thailand, the domestic economy, is largely black, under the table, "off the books," and totally dependent on a system of bribery, corruption, and illegal activity as well as prostitution and sex trade. Not things that you would want to pin the hopes for a higher world credit rating on.

In addition, the Thai business markets are totally opaque. There is no such thing as transparency. Most major businesses in Thailand are family owned even though they are supposedly "publicly traded." They are rife with nepotism and cronyism. Can you imagine the chicanery and manipulation in the Thai securities markets given what we know about Thailand and its lack of transparency and accounting? I mean real accounting and standards, not the Thai style manipulative type. Think about the manipulation of the law by "privileged" elite class folks. Now apply the lack of law and order, rampant bribery, and corruption, sex trade, illegal copying, "black economy," reneging on "business arrangements," and think through clearly whether you would raise the credit rating?

You seem to be talking about the USA. In any case, why does the credit rating of a country have to do with family owned companies?

[davejones]

If the massive drop of rice exports (from 40-100% down) is any indication from yesterdays posts, the country needs further downgrading, urgently rather than the lame ministry of finance trying to talk up credibility.

I think some on here don't realise how well the Thai economy is doing at the moment. The economy is actually growing at around 5-6% a year.

Rice exports down 100%? Don't be so stupid. If they were down 100% they wouldn't be exporting any at all.

[GentlemanJim]

Maybe Kittiratt hasn't taken into account how much 'Fitch Factor' will be applied to the Finance Minister of Thailand saying he tells white lies about the Thai economy to boost confidence in Investors!

[clockman]

Why should anyone believe that Thailand's credit rating should be raised? The Thai economy is largely based on exports that will be slowing down substantially more than any Thai source wishes to reveal. The rest of Thailand, the domestic economy, is largely black, under the table, "off the books," and totally dependent on a system of bribery, corruption, and illegal activity as well as prostitution and sex trade. Not things that you would want to pin the hopes for a higher world credit rating on.

In addition, the Thai business markets are totally opaque. There is no such thing as transparency. Most major businesses in Thailand are family owned even though they are supposedly "publicly traded." They are rife with nepotism and cronyism. Can you imagine the chicanery and manipulation in the Thai securities markets given what we know about Thailand and its lack of transparency and accounting? I mean real accounting and standards, not the Thai style manipulative type. Think about the manipulation of the law by "privileged" elite class folks. Now apply the lack of law and order, rampant bribery, and corruption, sex trade, illegal copying, "black economy," reneging on "business arrangements," and think through clearly whether you would raise the credit rating?

Never a truer word spoken, just wait till 2015!

[khaowong1]

Everyone does know that a S&P rating of BBB is just a notch above a junk rating, right? And most savvy investors wont buy anything below a AA+ rating. So, what are the Thai's so proud of? Beats me...

[PhilipCook]

Noitom, I rate your comments A+++, the ratings agencies factor in risk and uncertainty, hard to give high marks for black holes especially the person requesting it!

[chiangmaikelly]

Oh no!

[rubl]

Oh no!

Nice graph, could even be valuable if some explanation was added.

[Thai at Heart]

Getting an improved rating whilst government borrowing is increasing and reported tax receipts are falling is quite unlikely.

[chiangmaikelly]

Oh no!

Nice graph, could even be valuable if some explanation was added.

Sorry thought everyone here could read.

[Thaddeus]

Oh no!

Nice graph, could even be valuable if some explanation was added.

Sorry thought everyone here could read.

Can do, it only goes to 2010, btw.

[chiangmaikelly]

Oh no!

Nice graph, could even be valuable if some explanation was added.

Sorry thought everyone here could read.

Can do, it only goes to 2010, btw.

I tried to find a more up to date one. I think the last two years are better. Maybe someone else can find it.

[rubl]

Oh no!

Nice graph, could even be valuable if some explanation was added.

Sorry thought everyone here could read.

Without further explanation this graph explains all within it's beautiful simplicity

[chiangmaikelly]

Oh no!

Nice graph, could even be valuable if some explanation was added.

Sorry thought everyone here could read.

Without further explanation this graph explains all within it's beautiful simplicity

There is a place for you in the brigade thread, subdivision of the statistics lie brigade.

[Cardiff1963]

Why not a growth rate far exceeding any western country