Thailand‘s high degree of government financial strength, moderate levels of economic and institutional strength, and low to moderate susceptibility to event risk continue to support the country’s “Baa1” local and foreign currency bond ratings, according to Moody’s Investors Service. The ratings outlook is stable. After 6.4 per cent growth in 2012, Moody’s expects real GDP growth of 5 per cent in 2013 and 2014 for Thailand, supported by robust private consumption and investment, whereas export recovery will likely remain more subdued owing to the still fragile external demand and the rapid strengthening of the Thai baht, which is up more than 6 per cent versus the US dollar since the beginning of the year. In the credit analysis released today, the rating agency said that the government’s high financial strength is primarily derived from a relatively low government debt burden that is amply financed by deep onshore capital markets. Although Thailand’s revenue generating is the weakest among its peers – those with ratings from “A3” to “Baa2”, adherence to implicit fiscal rules has ensured that deficits have been largely contained. “Fiscal discipline has been tested by successive crises, but fiscal and debt ratios continue to be in line with rating peers, even when factoring in negative repercussions from populist fiscal policies. Thailand has a robust external payments position which has enabled favourable financing conditions for the government and the economy at large,” it noted. Moody’s does not anticipate a material deterioration in Thailand’s fiscal metrics in 2013-14, populist measures pose a risk to fiscal discipline and increased off-budget financing impairs transparency. The country continues to enjoy a low degree of external liquidity constraints, owing to its strong external payments position, despite a pick-up in the external debt-to-GDP ratio in 2012 (Source).