Moody’s lifts Thailand’s outlook to stable on easing US tariff shocks

[BANGKOK] Moody’s Ratings upgraded Thailand’s credit outlook to stable from negative, citing easing downside risks from US tariffs and improved domestic investment momentum. The sovereign rating was affirmed at Baa1.

The change reflects assessment that downside risks from a severe and prolonged tariff shock have diminished after US duties on Thai exports were reduced to levels broadly in line with regional peers, Moody’s said in a statement on Tuesday (Apr 21). While higher oil prices linked to the Middle East tensions may weigh on growth and public debt, Thailand’s exposure remains comparable to similarly rated economies, it said.

Only a year ago, the rating company had lowered Thailand’s outlook to negative, citing shocks from the US tariffs. The move drew a rebuke from the government, which accused it of “jumping the gun.”

The upgrade also reveal stronger investment momentum, reducing risks of a sustained decline in Thailand’s long-term growth, according to Moody’s. Private investment is recovering, supported by a robust pipeline of approved projects and streamlined approvals, with both applications and realised investment rising in 2025, it said.

The upgrade positions Thailand as a relatively stable investment-grade economy within South-east Asia, potentially supporting capital inflows. Still, lingering vulnerabilities such as higher oil prices, rising public debt, and weak long-term growth potential continue to limit upside and pose medium-term risks.

Moody’s decision could also relieve pressure on the Thai government as it considers issuing a special decree to raise 500 billion baht and expand the public debt ceiling. Officials are looking to secure additional funds to shield households from the global energy shock, even as fiscal space tightens.

SEE ALSO

Thailand mulls higher public debt for US$30 billion borrowing

Hormuz crisis spurs Thailand to fast-track long-standing landbridge project

Thailand rushes to secure oil, fertiliser as Strait of Hormuz remains shut

Thailand mulls public debt ceiling hike in face of energy shock

Foreign investors flee Thailand as Iran war, energy shock dash hope for economic revival

Thailand central bank cuts 2026 growth, says no limits to worst-case scenarios if war continues

More

DECODING ASIA

Navigate Asia in
a new global order

Get the insights delivered to your inbox.

The formation of a coalition with a sizable parliamentary majority after Prime Minister Anutin Charnvirakul scored a resounding election win has helped ease political risks, Moody’s said, adding that it could support policy continuity and improve the prospects for reform implementation.

The affirmation of the Baa1 rating reflects Thailand’s strong external position and relatively favourable debt affordability, though these strengths are balanced against weaker long-term growth prospects and a rising government debt burden over the next few years, Moody’s said. BLOOMBERG