Moody's: Ruling credit-negative

The Constitution Court's ruling to void the Feb 2 general election is credit-negative for Thailand, according to Moody's Investors Service.

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Thailand is now rated Baa1 with stable outlook by Moody's.

"The four-month old political crisis could spill over into the second half of this year, increasing downside risks to Thailand’s economic growth outlook and heightening the risks of more widespread and violent protest by anti- and pro-government groups," the ratings agency said in a statement on Monday.

The decision raises the risk that political deadlock will persist for a prolonged period, Moody's said, adding it estimated real GDP growth of 3.3% in 2014.

"However, we maintain our view that Thailand’s credit fundamentals are strong enough to withstand the political crisis," it said.

But the prolonged impasse into the second half of 2014 or escalation of violence would intensify downward credit pressures, it concluded.

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