The royalist anti-government People's Alliance for Democracy (PAD) has lifted its crippling siege of Bangkok's airports after a court ruling that disbanded the governing party, backed by ousted former Prime Minister Thaksin Shinawatra, for electoral fraud. But analysts say the ruling has done nothing to solve the fundamental power struggle undermining Thailand's stability.

Following is a round-up of political and country risk assessments for Thailand in the wake of the recent turmoil:

Moody's investor services

'Resilient to the political upheaval of the 2006 coup, Thailand's economic and financial performance has also withstood the historic volatility in commodity prices in the past two years, and the global financial crisis of the past year,' Mr Tom Byrne, Moody's regional credit officer, said on Thursday.

'It is not clear, however, whether Thailand's credit fundamentals will withstand the combined effects of the unfolding global recession on top of the ongoing domestic political discord and paralysis.' As well as cutting the sovereign rating outlook, Moody's cut its 2009 Thai GDP growth forecast to 0.5 per cent from 3.0.

'The inability of the country's judicial and executive branches to prevent civil disobedience from causing major dislocations, not only with regard to the occupation of Government House, but also the airport seizures of the past week in Bangkok, suggest that Thailand's institutional strengths have become compromised,' Mr Byrne said.

IHS Global Insight

IHS Global Insight downgraded its political risk rating for Thailand to 3.25 from 3 on Tuesday, and its security risk rating to 3.5 from 3.25.

'This reflects the suspension of political process and the heightened risk of military intervention, as well as widespread concerns of civil unrest,' said analyst Kristina Kazmi.

She noted Thailand remains locked in a 'cycle of instability' - new elections would probably again hand a majority to proxies of Thaksin, given his strong backing from the rural population. This could lead PAD to resume protests.

'Thailand remains locked in this structurally flawed system for the foreseeable future,' she said.

'To all intents and purposes, Thailand does not have a functioning government. The risk of civil unrest is growing, and with it, the accompanying risk of military intervention.

The heightened possibility of a coup is reflected in the downgrading of Thailand's political risk rating.

'If the parliament does indeed elect a prime minister the PAD does not approve of, the same cycle of protests and deadlock will start again. In that case, a military coup seems almost inevitable, particularly as civilian-military relations remain extremely weak. In any case, it appears increasingly likely that the elite will win out over the rural majority.'

Standard & Poor's

Standard & Poor's downgraded its sovereign outlook on Thailand to negative from stable on Monday.

'The recent occupation of the two airports in Bangkok by anti-government protesters has increased the risks to sovereign creditworthiness,' said analyst Kim Eng Tan.

'It has caused serious disruptions to economic activities in the kingdom and raises the possibility of widespread violence markedly. These developments will add to the negative pressures of a global slowdown on Thailand's economy.

'The sovereign ratings could be lowered if economic performance weakens sharply as a result,' Mr Kim said, adding that the outlook could return to stable if political divisions were resolved 'peacefully in a sustained manner'.

Fitch ratings outlook

Fitch downgraded Thailand's sovereign outlook to negative from stable on Monday.

'The revision to the outlook is based on Fitch's view that the extended period of political turmoil surrounding Thailand's leadership shows no sign of resolution, and may undermine Thai sovereign credit fundamentals, especially as the global economy enters recession,' said sovereign group associate director Vincent Ho.

'It is a concern that, in the absence of effective and credible political leadership, economic policy could be either neglected or ineffective at a time when policy stimulus is likely required to address a sharp economic correction.'

Economist Intelligence Unit The EIU's expectations for Thai economic performance and political stability have not dramatically worsened over the past week, analyst Jacob Hamstra said.

'But this is largely because they had already fallen dramatically in the past month (for the economy) and over the past two years or so (regarding the political situation).

'Our assessment has for quite some time been that ending Thailand's political crisis will require a solution to the power struggle between the royalist bureaucratic elite and the urban middle class on one side and Thaksin's supporters on the other.

'In turn, we have been and continue to be quite pessimistic about the prospects of such a resolution occurring in the short- to medium-term.' The EIU cut its 2009 Thai growth forecast in November to 1.9 per cent from 3.8 per cent.

Its country risk score has risen to 50 in December from 48 in June, due to an uptick in economic risks. The political risk score has remained steady at 65 over the past 6 months. -- REUTERS