SINGAPORE, Sept 18 (Reuters) - Belgium's export credit agency ONDD said on Thursday it had downgraded its medium/long-term political risk rating for Thailand and reduced the amount of coverage for export transactions, due to ongoing instability.
The move is a sign that other state and parastatal export credit agencies may follow suit with downgrades, as their ratings tend to be highly correlated. ONDD's political risk reasearch is highly regarded in the industry.
"Thailand is a polarised country, both from a political and a socioeconomic point of view," ONDD said in a statement.
"Political uncertainty and the risk of new political violence are affecting the investment climate and private consumption, further deepening the severe recession Thailand is in for the first time since the Asian crisis."
Thailand's medium/long-term rating was downgraded to 3 from 2. Ratings are on a scale of 1 to 7, the higher the riskier.
For comparison, Singapore is rated 1, Malaysia 2, the Philippines 4, and Indonesia and Vietnam 5.
Export credit agency risk ratings affect the premiums exporters have to pay to insure transactions with businesses in each country. They reflect the risk that economic or political upheaval may interfere with receiving payment. (Reporting by Andrew Marshall; Editing by Bill Tarrant)