The agency said the Kingdom's outlook was stable.

The ratings were originally placed on CreditWatch, with negative implications, on September 19, following the military coup.

"The affirmation of the credit ratings reflects Standard and Poor's view that the country's credit fundamentals remain supportive of its current ratings in the wake of the military coup," said credit analyst Kim Eng Tan.

Non-constitutional changes in government are highly unusual among territories with credit ratings similar to Thailand, and typically have negative implications for creditworthiness, the agency said. Nevertheless, the security and policy risks arising from the latest regime change in Thailand have largely dissipated, mainly due to assurances of a swift return to political stability.

Furthermore, Thailand's economic and financial indicators remain stronger than territories with similar ratings and are not expected to deteriorate significantly in the short to medium term.

Standard and Poor's said Thailand's real growth in gross domestic product was projected to average just below 5 per cent over the next three years. Therefore, in spite of anticipated fiscal deficits in the next three years, general government debt should fall to 29 per cent of GDP in 2008 from about 31 per cent this year.

Although small current-account deficits could reappear when the government ramps up public capital spending, foreign reserves - which are likely to reach US$64 billion (Bt2.35 trillion) by the end of the year - and low public external debt will continue to offer the country significant flexibility in external financing.

The agency said the stable outlook on Thailand's credit ratings was based on the expectation of a return to political normalcy and stability by the end of next year. This will most likely be achieved by the election of a new government.

This is critical for the long-term social stability that is needed to create an environment conducive to a revival in corporate investment and stronger economic growth, it said.

Standard and Poor's said a positive revision in the outlook or credit ratings could arise if a new government successfully implemented decisive measures to deal with structural impediments to higher economic growth. Conversely, if widespread unrest breaks out during or after a political transition, a negative change to the sovereign credit ratings on Thailand is likely.