Call for political stability in Thailand to boost growth - Bangkok Post
Greater political stability would support Thailand's economic growth and help the country maintain its sovereign credit rating over the longer term, according to S&P Global Ratings.
Speaking at Thailand Credit Spotlight 2026: Financing Thailand's Next Growth, co-hosted by S&P Global Ratings and Tris Rating yesterday, Kim Eng Tan, managing director and sector lead for sovereign ratings at S&P Global Ratings, said policy stability and continuity were important components of the country's sovereign risk profile.
In June this year, S&P Global Ratings affirmed Thailand's sovereign credit rating at BBB+ with a stable outlook.
Mr Kim said political instability had been one of Thailand's key weaknesses over the past two decades, weighing on economic growth despite the country's relatively stable economic performance compared with some regional peers.
"Thailand has not been as strong, and one of the reasons, in my view, is the lack of political stability and policy continuity. Some policies have also increased public spending and debt while weakening revenue, which has affected the country's sovereign risk profile," he said.
Thailand's government debt has risen significantly over the past 10-15 years, and a continued increase could put further downward pressure on the country's credit rating.
However, the main concern is not the level of public debt itself, but its upward trajectory and the government's ability to maintain fiscal discipline over the longer term. Another key consideration is whether the government can formulate and implement policies that unlock Thailand's economic growth potential.
Mr Kim also highlighted the liabilities accumulated by the Oil Fuel Fund, warning that they could eventually add to the government's debt burden.
The fund, which is used to stabilise domestic fuel prices, incurs losses when oil is purchased at high prices but sold to consumers at lower prices. These losses can increase the fund's liabilities, requiring the government to consider measures to manage the growing burden.
Cuts in government spending could help to contain the budget deficit and public debt. However, substantial reductions in essential infrastructure investment could undermine economic growth, potentially creating another source of pressure on the sovereign credit rating.
"Thailand's public debt could stabilise over the next few years if the government delivers on its commitment to fiscal consolidation and reduces the budget deficit to below 3% of GDP," Mr Kim said.
Thailand has experienced greater political volatility than some of its regional neighbours in recent years, contributing to higher investor perceptions of political risk. Given the country's political history over the past two decades, its political outlook remains difficult to predict, although the current government appears likely to remain in power for the next few years.
Singapore and Vietnam, for example, have maintained greater policy continuity under long-standing ruling parties, while Indonesia has experienced changes in government in a relatively predictable manner. Malaysia, meanwhile, has seen greater political volatility in recent years, with implications for policy continuity.
Mr Kim added that despite some improvement in political stability, attempts to initiate no-confidence motions against ministers continued to create uncertainty, making it more difficult for the government to maintain policy continuity and focus on long-term economic planning.
As the global economic landscape undergoes a major transformation, Thailand has an opportunity to attract new investment and accelerate economic growth. However, its ability to capitalise on these opportunities will depend on how competitive it remains relative to its regional peers, said Mr Kim.
