Ratings

PPT doesn’t always pay too much attention to business stories, but this one at Bloomberg appeared worthy of some interest as it suggests at least some of the reason for the (we think failed political) strategy adopted by Yingluck and Thaksin Shinawatra:

Thailand’s credit rating was restored to BBB+ by Fitch Ratings four years after political turmoil prompted a cut, signaling confidence in Prime Minister Yingluck Shinawatra’s ability to maintain social stability.

It is also why her opposition is still seeking to destabilize the government. Fitch says it “has revised its assessment of the risks to policy predictability and the investment environment from political and social tensions…”. The company said: “The government led by Yingluck Shinawatra has consolidated its position and has faced no serious extra-legal challenges since its election in July 2011.”

Fitch raised Thailand’s level on 8 March, “bringing the rating back in line with rankings by Standard & Poor’s and Moody’s Investors Service. The outlook is stable.” As the report notes:

Yingluck has sought to avert political tensions since taking power in 2011 by shelving measures that would bring back Thaksin Shinawatra, her brother who was ousted as prime minister in a coup seven years ago. The upgrade comes as her government prepares a bill to spend 2 trillion baht ($67 billion) by 2020 on high-speed trains and mass-transit networks.

… Vikas Kawatra, head of institutional broking at Maybank Kim Eng Securities (Thailand) Pcl, the country’s biggest brokerage. “Things are going fine and there’s no need for Thaksin or Yingluck to make any radical moves.”

As PPT readers will know, but not, apparently, her opponents, especially those in the poorly-monikered “Democrat” Party, “Yingluck has shelved proposals to pass a broad amnesty that would include Thaksin…”.

Fitch had lowered Thailand’s rating in April 2009 following the first red shirt uprising.