On Tuesday, Moody's changed its outlook on the government of Thailand to negative. The action was driven by the change in outlook on Thailand's Baa1 sovereign rating to negative from stable, reflecting increased risk of a further weakening in Thailand's economic and fiscal strength, amid new US tariffs and heightened global uncertainty, Moody's said in a statement. A deteriorating macroeconomic backdrop could weigh on the credit profiles of Thai banks, which have been struggling with loan growth and asset quality issues exacerbated by the coronavirus pandemic, it said. It would also weaken the Thai government's capacity to support the banks when required, the statement added. "If Thailand's sovereign rating is downgraded, it would lead to rating downgrades for the seven Thai financial institutions mentioned above, given that their long-term deposit and/or issuer ratings include government support uplift and/or are now the same as the sovereign rating," the statement said.