BANGKOK: Thailand's credit rating is not in danger of being downgraded because of its rice intervention scheme, rating agency Moody's said on Thursday, after it warned this week that losses from the scheme might threaten the goal of a balanced budget.
"The rating is not under threat. If you look at the credit analysis that we published in late April, there are a lot of factors that support the rating at the current level of Baa1, and that's also why we have a stable outlook," Moody's sovereign risk analyst Steffen Dyck told Reuters.
Moody's Baa1 rating is at the lower to medium end of the investment-grade scale.
Dyck described Thailand's public finances as "comparatively strong" when set beside those of countries with a similar rating and said its economic growth outlook was "relatively robust".
The government has given very little information on the rice-buying programme since it started in October 2011 with the aim of helping poor farmers. On Wednesday, after the warning from Moody's, Prime Minister Yingluck Shinawatra told her commerce minister to clarify the costs.
In April, Moody's said the outlook for Thailand's Baa1 rating was stable, based on a "high degree of government financial strength" among other factors, although it noted that "populist measures" were a risk to financial discipline.
The government buys from farmers at prices that have made Thai rice uncompetitive on world markets, leading to growing stockpiles funded from the state budget and costing Thailand its spot as the world's number one exporter.
A newspaper report late last month put losses from the scheme in the 2011/12 harvest year at 200 billion baht ($6.6 billion), prompting the warning from Moody's, and a finance ministry official who has seen the figures told Reuters the losses continue to rise.
"These recent losses, and any further losses from the unmodified rice-buying scheme, increase the difficulty of the government's task of reaching its goal of a balanced budget by 2017, and are credit negative for the Thai sovereign," Moody's said.
Asked if the ratings agency had had any communication with the government since Monday, Dyck said: "We tried to confirm these numbers with the government but weren't able to do so."
Commerce Minister Boonsong Teriyapirom told Thai television on Thursday that the 200 billion baht figure was incorrect.
"I don't know how it leaked out to the media, but what I can tell you now is that the data was wrong. The rice scheme did not cause that huge loss," Boonsong said.
Officials from the ministries of commerce and finance were working on the figures now, he said. "I will hold a press conference and clarify everything to the media tomorrow."
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