Thailand is in good shape. The Kingdom has successfully navigated the stormy environment sparked by new tariff and trade policies, prompting Moody’s Ratings to raise its outlook to stable from negative while crediting what it sees as a new period of political stability.

Moody’s upgraded the outlook for the Government of Thailand to stable from negative while affirming the foreign- and local-currency issuer ratings and the local-currency senior unsecured credit rating at Baa1.

The global credit rating agency said that political stability and policy continuity were major factors in its decision. In national elections in February, voters returned Prime Minister Anutin Charnvirakul to power for the second term.

Moody’s said its assessment reflected its view that downside risks from tariffs enacted by the administration of President Donald Trump had diminished. Following a reduction in American tariffs on Thai exports to levels in line with regional peers, the agency does not expect Thailand to suffer a severe or persistent shock.

Exports are the main driver of Thailand’s economy. Higher tariffs could make Thai products and services more expensive in the American market, reducing the Kingdom’s competitiveness and putting its economic growth at risk. This prompted Moody’s to downgrade Thailand’s outlook to negative when the levies were first announced.

However, because the tariff rate imposed on Thailand is the same as or similar to that of its competitors, the Kingdom is essentially on a level playing field with its rivals.

Moody’s said this also held true regarding another economic concern facing the Kingdom: rising and volatile oil prices resulting from the conflict in the Middle East.

“While we expect higher oil prices linked to the Middle East conflict to weigh on Thailand’s growth and increase the government debt burden, the country’s exposure to these risks is broadly comparable to that of similarly rated peers,” Moody’s said.