Dr. Ekniti reveals that Moody's ranks Thailand as one of the top 5 strong emerging markets, excellent at coping with global volatility.
Dr. Ekniti revealed that Moody's has ranked Thailand as one of the top five emerging market countries with high resilience to global economic volatility. He pointed out that the issuance of the emergency decree to borrow 400 billion baht is to combat the new crisis stemming from inflation and rising energy costs.
May 6, 2569 – Dr. Ekniti Nitithanpraphat, Deputy Prime Minister and Minister of Finance It has been revealed that the global credit rating agency Moody's has released its latest report stating that: Thailand is one of five emerging market countries, along with India, Malaysia, Indonesia, and Mexico, that have demonstrated strong resilience in withstanding severe global economic volatility.
Based on its fundamental analysis, Moody's sees strengths in several areas, particularly external stability, with a continued current account surplus and high international reserves of approximately US$2.8 billion, or over US$3 billion including forward foreign exchange positions.
This strong financial position is sufficient to import goods for almost 10 months and is 2.5 times higher than short-term foreign debt (less than 1 year old). Even if all foreign investment were to be withdrawn, Thailand would still have sufficient reserves.
Furthermore, the Thai government bond market has been praised for its depth and resilience, with almost all (99%) of public debt borrowed domestically and at very low interest rates, averaging 1.2% for 2-year maturities and approximately 2.1-2.2% for 10-year maturities.
During his participation in the World Bank and International Monetary Fund Annual Meetings, Thailand explained to the World Bank and credit rating agencies its economic reform approach focused on creating new sources of growth.
In particular, investment in clean energy through BOI policies and the promotion of Direct PPA, resulting from proactive efforts through BOI Fast Pass, led to an 18% growth in actual investment figures in the first quarter, unlocking the country's competitive potential.
However, despite the overall strong outlook, it is acknowledged that the country is facing a third wave of crisis: inflation and rising energy costs, which are beginning to impact the cost of living for citizens and business costs. The latest inflation figures have soared to almost 2.9%, and transportation costs have increased by over 10%.
To address the "double squeeze" phenomenon (revenue shrinking while costs rise), the government needed to issue an emergency decree authorizing a 4 billion baht loan. This was to provide a "buffer" budget for the public and SMEs. Without government intervention, unemployment, business closures, and economic scarring could slow the country's GDP growth in the long term.
Regarding concerns about public debt, Dr. Ekniti stated that Thailand's current debt-to-GDP ratio is approximately 60%, which is lower than the global average of 90%. The government remains strictly adhering to fiscal discipline and confirmed that budget spending under this emergency borrowing decree will focus on two main areas: short-term relief and economic transition (for long-term benefits), with an emphasis on transparency and open disclosure of information via the website for scrutiny.
“The reason we needed to issue the emergency decree to borrow money was to prepare our resources. Today, economic figures confirm that the anticipated events are gradually having an impact. Therefore, we need to have sufficient resources to cope with them. If Thailand hadn't issued the emergency decree to borrow money, if the government hadn't done anything, the cost of living for Thai people would start to rise. People's incomes wouldn't keep up, and the cost of living would be affected. Consequently, businesses might see reduced profits, people might lose their jobs, and incomes would shrink – a significant shock.”
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