Credit rating agency Fitch has maintained Thailand’s long-term foreign-currency issuer default rating (IDR) at BBB+ with a stable outlook. In its report, Fitch forecasts a real GDP growth rate of 3.7% in 2023 and 3.8% in 2024, showing an improvement from 2.6% in 2022. The agency expects economic prospects to strengthen due to a broad-based recovery in tourism from key source markets and resilient private consumption as the labor market gradually recovers. However, the export sector may face challenges due to subdued global demand and the impact of monetary tightening in advanced economies.
Fitch remains optimistic about the revival of international tourism, projecting an increase in tourist arrivals to around 29 million in 2023 compared to 11.2 million in 2022. The agency attributes this positive outlook to China’s rapid reopening. Fitch highlights Thailand’s strong external position as a key strength, providing resilience against global financial conditions and geopolitical risks. It anticipates a current-account surplus of 2.0% of GDP in 2023, rising to 3.9% in 2024, reversing the average deficits of the past two years. This projection reflects higher tourism revenue and the positive impact of falling oil prices on terms of trade.
Regarding government debt, Fitch expects it to increase to 55.9% of GDP by the fiscal year 2025, aligning with the median for BBB-rated peers. The agency predicts headline inflation to average 2.0%, within the Bank of Thailand’s target range of 1.0% to 3.0%, compared to 6.1% in 2022.
However, Fitch expresses concerns about lingering political uncertainty and its potential impact on the country’s economic and fiscal policies. While the formation of a new administration could affect effective policymaking, Fitch believes that any resulting changes are unlikely to significantly alter the government’s key economic development strategy.