S&P : Delay of political restoration to normalcy can lead to negative outlook

"The outlook on the credit ratings on Thailand is stable on the prospect of a near-term return to political normalcy. This is expected to stem the deterioration in credit support and cap at below one-third the risks of credit metrics sliding to levels that are no longer appropriate for its current ratings in the next two years," the rating agency said.

Standard and Poor's on Monday also affirmed its foreign currency 'BBB+/A-2' and local currency 'A/A-1' sovereign credit ratings on Thailand with the stable outlook.

The rating agency said the damage to Thailand's credit fundamentals has been contained by expectations of a return to political normalcy by early 2008. The coup leaders' promise to hold elections before this time has been crucial in preventing unrest in the Kingdom and a large-scale pullout of long-term investors. Thailand's economic advantages remain largely intact and a swift return to political normalcy could rekindle investment activities over time.

It said a smooth return to political stability that is followed by decisive actions to improve the Kingdom's economic competitiveness could see the outlook being revised positively. - The Nation