Thailand's debt rating raised by Fitch on strong growth
Thailand's debt rating raised by Fitch on strong growth
Dominic G. Diongson and Beth Jinks, Bloomberg, Bangkok
Thailand had its long-term ratings raised by Fitch Ratings,
which cited strong economic growth and a decline in the nation's
overseas debt.
The foreign-currency rating was raised one step to BBB+, the
eighth-highest investment grade. The local-currency rating was
raised one step to A, Fitch said in a release today. The outlook
is stable.
"Most of Thailand's credit indicators now look very good
compared to BBB-rated peers," Ai Ling Ngiam, a Fitch associate
director, said in the statement. "Thailand's external finances
are among the strongest, if not the strongest, in the BBB
category."
Current account surpluses averaging 5.7 percent of gross
domestic product since 2000 have helped Thailand reduce its
external debt burden by half since the end of 1997, Fitch said.
Foreign reserves have risen to 49 billion baht (US$1.2 billion)
at the end of March.
The rating increase puts Thailand on a par with Poland and a
step above South Africa. In the Asia-Pacific region, only
Indonesia, the Philippines and Vietnam have lower ratings.
The change brings Fitch's rating for Thailand's foreign-
currency debt in line with those of Moody's Investors Service and
Standard and Poor's.
Standard & Poor's upgraded its Thailand rating one notch to
BBB+ in August, while Moody's has rated the nation its
equivalent, Baa1, since it raised the country's long-term debt
two levels in November 2003.
"Fitch has a different perspective on Thailand," said Teerasan
Dutiyabodhi, who helps manage the equivalent of $51 million in
fixed-income assets at Aberdeen Asset Management Co. in Bangkok.
Unlike other ratings agencies, "Fitch is operating in Thailand,
and it closely watches Thailand more than Standard & Poor's or
Moody's."
Thailand was stripped of investment grade ratings in 1997,
when mounting overseas debt forced the nation to devalue the
baht, touching off a regional economic crisis. Thailand's economy
shrank 10.5 percent in 1998 after growing as fast as 12.2 percent
a decade earlier.
Fitch last raised Thailand's ratings in September 2003, saying
that "five years of deep external debt reduction are at last
being matched by clear signs of economic recovery and fiscal
consolidation."