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."