A rating agency, R&I, last night downgraded Thailand’s outlook from Stable to Negative, will this be the first of many? Thus far Moody’s and S&P haven’t commented just yet, on a worst case scenario you can imagine all rating agencies downgrading Thailand to the point where the cost of issuing new debt skyrockets and then leads the country to a version of Greece, but would this really happen? Doubt it.

On May 22, Thailand’s military took control of the entire country, which has been in a political crisis since November 2013. This move is aimed to restore order and achieve political reforms under military rule. Nevertheless, it is uncertain whether the situation will develop as expected by the military. If economic and fiscal management is not normalized and political reforms do not progress, the economy will continue to be stagnant, and the economic fundamentals could weaken over the medium to long term. R&I needs to keep an eye on developments and has changed the Rating Outlook to Negative.

Source: R&I