BANGKOK, May 25 - Fitch Ratings says political and fiscal uncertainty May be a drag factor in Thailand's credit rating.
Fitch reports that The Election Commission of Thailand (ECT) has up to 60 days to announce the official results after the May 14, 2023 election, but preliminary figures suggest the Progressive Party has won the most seats in the House of Representatives. while the Pheu Thai Party The previous largest opposition party It came in second place and it was unclear whether the Progressive Party would get enough support to form a coalition government. This allows for the prioritization of policies in a broader framework. Effective policy-making could be temporarily limited if the recruitment process for coalition partners delays the formation of a new government by months.
To win a majority in parliament and to choose the next prime minister. The leading party to form a government must collect at least 376 votes from the 700-seat parliament. It consists of 500 new members of the House of Representatives and 250 members of the Senate, appointed by the junta ahead of the 2019 elections.
As a base case forecast, the impact on Thailand's credit rating in the short term will be limited. In November 2022, Fitch Ratings affirmed Thailand's credit rating at BBB+ and maintained Thailand's outlook (Outlook) at Stable Outlook. coalition government This makes effective policy making complicated. But it is unlikely to lead to major changes in the country's major economic development policies. and although the outlook for fiscal policy is uncertain But the new coalition government is expected to stick to some of the previous government's key economic policies.
There may be a disruption in spending under the budget for the fiscal year ending in September 2024 if negotiations to form a government are delayed. Will negatively affect the economic outlook of Thailand. But we still expect growth to accelerate in 2023 and remain strong in 2024, with a recovery in tourism and private consumption the key drivers.
Thailand's public fiscal sector indicators that have deteriorated significantly during the COVID-19 outbreak which affects the credit rating at the current level. But Fitch expects General government debt/GDP and interest/income in 2023-2024 will remain in the median plane of the ‘BBB’ rating of countries.”
“If the next government is unable to stabilize the public debt ratio, for example, there is continued spending pressure. or there are external effects which are beyond our baseline assumptions. That would result in a lower rating on Thailand,” Fitch said in a statement. - Thai News Agency
Source: Thai News Agency