Moody’s raises Thai outlook to positive

The world’s leading credit rating agencies agree that Thailand’s future is looking brighter as Moody’s Investor Service raised the Kingdom’s outlook to positive from stable, following in the footsteps of Fitch Ratings, which also raised Thailand’s rating to positive one week ago.

Moody’s raised Thailand’s outlook, it said, because the government has been investing in human and physical capital development. Those investments should improve the Kingdom’s competitiveness, especially in the context of Thailand’s long track record of fostering a stable and predictable macroeconomic environment.

“The government’s investment plans on physical capital may partly address Thailand’s competitiveness challenges,” Moody’s said. “In particular, under its 20-year national strategy, the government’s economic plan to raise infrastructure investment in the 50-billion-dollar Eastern Economic Corridor (EEC) could support Thailand’s competitiveness through attracting new businesses and technologies.”

Moody’s also recognized the Kingdom’s commitment to human capital development. Some economists have voiced concern that Thailand’s relatively small pool of human capital – a skilled and talented workforce capable of innovation – could hinder the success of its national strategy named Thailand 4.0.

In recent years, however, the public and private sectors have been investing resources to create a more educated workforce capable of working in and contributing to the advanced and higher-technology industries that will drive Thailand’s transformation.

Moody’s affirmed Thailand’s Baa1 rating, reflecting the country’s strong public and external finances. Those healthy finances, along with the country’s diverse economy, should serve as an effective absorber of external shocks.

The agency said it would consider upgrading Thailand’s rating as Thailand’s competitiveness begins to rise and the skills gap begins to close.

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