Local analysts look at factors behind upbeat assessment by Moody’s
Moody’s upbeat assessment of the Thai economy reflects the strength of the financial sector and the country’s international reserves, while the Stock Exchange of Thailand (SET) has remained resilient during the war in the Middle East, analysts say.
In its latest report, Moody’s Ratings identified Thailand, Malaysia, India, Indonesia and Mexico as five emerging economies best positioned to withstand global shocks.
Highlighting stronger policy frameworks and improved resilience over the past five years, the credit rating agency noted that these economies avoided sharp spikes in risk premiums and maintained market access despite the Covid-19 crisis, global interest rate tightening, banking sector stress, and trade tensions.
“Moody’s assessment reflects the high liquidity of Thailand’s financial market, with the capacity of Thai banks having improved since the pandemic to withstand external shocks,” said Koraphat Vorachet, assistant managing director and head of research at Krungsri Securities.
The country’s economic resilience is also supported by solid international reserves, although fiscal measures are critically needed in the short term to stimulate domestic consumption and investment, Mr Koraphat added.
He views Thailand as well positioned to attract foreign direct investment (FDI). According to the Board of Investment, FDI reached a new high in the first three months of 2026, 85% of which was drawn from S-curve industries, including data centres.
According to Asia Plus Securities, the SET remained resilient, falling only 0.3% as the Middle East war dragged on for nearly 10 weeks. The Thai bourse was supported by its 57% weighting in technology and commodities, which directly benefited from surging oil prices and positive earnings surprises from 46 companies.
Krungsri Securities and Asia Plus share the same view: the US-Iran conflict has showed signs of easing, sending Brent crude prices into a gradual decline, mirroring past energy crises such as the 1990 Gulf War and the 2022 Russia-Ukraine war.
“As the war recedes, capital is reallocating due to tightening global monetary policy, a weakening dollar, and a strengthening baht, supporting fund flows to the SET,” Asia Plus said.
Mr Koraphat projected that the Thai index could reach 1,600 points later this year as US-Iran negotiations near a conclusion. Tehran has proposed a 14-point framework under which it would suspend its nuclear weapons programme for 12-15 years, while the US has proposed a phased sanctions relief plan alongside the restoration of normal maritime operations.
“The outlook is pending a formal US response, as Project Freedom has been temporarily suspended pending Tehran’s reply within 48 hours,” Krungsri Securities said, referring to a US operation to escort ships through the Strait of Hormuz.
Patrick Poulier, first executive vice-president and head of SCB Financial Markets, said the baht strengthened after reports of a proposed US-Iran memorandum of understanding to end the war caused the dollar to weaken, leading regional currencies, including the baht, to appreciate.
“Due to the ongoing uncertainty surrounding the war, the market could become volatile again,” he said. “In the short term, as the conflict continues and the Strait of Hormuz remains closed, the Thai currency may weaken slightly. In the medium to long term, however, the baht is expected to strengthen.”