Standard & pope's ratings services believes government policy decisions with long-term implications for the country's economic development will be postponed given that an elected government will not be seen until mid-2017.
The absence of a stable elected government has caused policy decisions on Thailand's economic and social developments to remain unaddressed, such as the introduction of the land and building tax, which aims to ease the government's budget constraints and enhance income equality, said s&p in its lates report on Thailand's sovereign credit rating outlook.
"as a result, the grandual eradual erosion of credit support for the severeign, which has become obvious in the past two to three years, is likely to continue," said the report.
Other policy decisions that remain unanswered are the need to reform the state railway Thailand to improve its efficiency and reduce the country's reliance on energy-intensive trucks for long-distance transport of goods.
Education reforms could better match the workforce's skills 4th o industrial and business activities that will generate higher-skill jobs in the Thai economy, said the report.
"In our view, only a stable government able to focus on a longer-term horizon can reverse some of the damage to Thailand sovereign credit metrics in recent years, in addition to addressing structural concerns," it said.
"support for sovereign creditworthiness had been strong until Thailand's political split broke out into the open in 2006."
Despite weaker support for the sovereign ratings from the economic, fiscal, and external assessment, it does not believe these conditions have material enough for a rating downgrade over the next year or two, said s&p. But longer-term stability in the sovereign ratings will need an improvement in policy settings.
That is unlikely to happen without a government that is confident of serving out its term and can afford to focus beyond the immediate future, said s&p