Moody’s changes Thailand’s outlook to ‘Negative’, impacting currency and bond yields (Current Issue No.3578 Full Ed.)

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On April 29, 2025, Moody’s Ratings revised Thailand’s outlook from ‘Stable’ to ‘Negative’ while affirming the country’s credit rating at Baa1. Moody’s cited the decision to change the outlook to ‘Negative’ stems from the risk that Thailand’s economic and fiscal strength will weaken further.
KResearch views that this revision differs from the previous shift to a ‘Negative’ outlook in December 2008 during the subprime crisis in two key aspects. Notably, the Thai economy in 2008–2009 was affected by the global financial crisis, and public debt level in the country remained low at that time. In the current instance, however, Thailand’s economic recovery faces multiple challenges, exacerbated by limited fiscal capacity compared to the previous round.
The Thai financial market’s reaction to the outlook revision to ‘Negative’ has been relatively muted, as other factors have exerted a greater impact. These include movements in the US Dollar driven by trade war concerns and foreign fund flows, which turned to net inflows following the Monetary Policy Committee (MPC)’s decision to cut the policy rate by 0.25 percent to 1.75 percent at its meeting on April 30, 2025.

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