Fitch upgrades Thailand outlook to ‘stable’

Fitch Ratings has upgraded Thailand's outlook to "stable" from "negative", citing improved confidence in government debt stabilization and political conditions following the recent general elections. The agency reversed a previous downgrade warning due to concerns over rising debt and weak growth. Thailand's economy has been resilient despite higher energy costs and reduced tourism demand, with the technology and data-center sectors supporting growth.

The rating change follows a smooth political transition after the February elections, with the Prime Minister's coalition securing a working majority. Fitch noted that Thailand's strong external finances and ability to fund most government debt domestically continue to support its investment-grade rating. The debt-to-GDP ratio is projected to remain below 63% by 2028, down from a previous forecast of 65%.

The country's current account balance is expected to return to a surplus in 2027, driven by high oil prices and capital goods imports for data center construction. This upgrade follows a similar action by Moody's in April that cited reduced downside risks from US tariffs. Fitch also affirmed Thailand's BBB+ sovereign credit rating.

The downgrade comes with Deputy Prime Minister and Finance Minister Ekniti Nitithanprapas stating that the move demonstrates growing confidence in the government's policy direction and that the government will accelerate policies to promote investment in new industries, transition to green energy, and maintain fiscal discipline.