IMF Executive Board Concludes 2025 Article IV Consultation With Thailand

Washington DC; February 2026: The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Thailand.

Thailand’s economic growth is estimated to have slowed from 2.5% in 2024 to 2.1% in 2025, as increasing external and domestic headwinds, including trade policy uncertainty, constrained credit growth, and a slower rebound in foreign tourist arrivals continued to weigh on activity. Inflation has remained largely subdued, mainly due to supply-side factors such as lower energy and raw food prices, and partly reflecting soft demand. Credit growth is constrained, and financial conditions remain tight. Nonetheless, Thailand’s external stability remains robust, supported by ample international reserves and moderate levels of external debt.

The authorities have responded actively to the rising challenges to mitigate their impact. Actions include targeted fiscal measures to support vulnerable groups and bolster consumption, additional monetary policy easing, initiatives to facilitate household debt restructuring, liquidity support for small and medium-sized enterprises, and renewed efforts to strengthen fiscal discipline.

Looking ahead, growth is expected to moderate further to 1.6% in 2026, as external headwinds persist and domestic demand remains constrained. Risks to the outlook remain elevated and tilted to the downside. Prolonged trade policy uncertainty, global financial market volatility, and domestic political developments could further weigh on growth and inflation. However, a swift resolution of trade tensions or easing domestic uncertainty could support a recovery in growth.

Executive Board Assessment –

Executive Directors noted that Thailand’s economy has shown resilience in an uncertain global environment but is now facing increasing headwinds. In the context of limited policy space, Directors underscored the importance of a carefully calibrated policy mix, building on the recent reform momentum, to support the recovery while safeguarding stability, alongside accelerated structural reforms to lift medium-term growth and facilitate external rebalancing.

The Directors have emphasised that given the narrowing fiscal space, fiscal support should remain targeted and parsimonious, anchored in a credible medium‑term consolidation strategy. They welcomed the authorities’ commitment to fiscal prudence as reflected in the Medium-Term Fiscal Framework and stressed that effective implementation remains key. Directors agreed on the need to raise revenues to rebuild buffers and create space for growth‑enhancing spending and strengthened social protection. They also agreed that strengthening the fiscal rules framework and public financial and debt management would enhance policy credibility and effectiveness.

Directors welcomed the accommodative monetary policy stance to support domestic demand and mitigate downside risks to inflation. They generally saw scope for additional data-dependent monetary easing, supported by continued efforts to strengthen policy transmission, including measures to address elevated household debt. Directors stressed the importance of continued monetary-fiscal policy coordination, while safeguarding central bank independence. They reiterated that the exchange rate should continue to serve as a key shock absorber, with foreign exchange intervention limited to restoring orderly market conditions under non-fundamental shocks.

Directors noted that systemic risks in the financial sector remain contained but stressed the need for continued close monitoring amid tight financial conditions and elevated credit risks. They called for further efforts to strengthen regulation and supervision, including of savings cooperatives; facilitate orderly household debt restructuring and support SMEs, while maintaining strong governance and mitigating moral hazard; and continue strengthening the AML/CFT framework.

Directors agreed that a deteriorating external environment underscores the need for decisive actions to accelerate structural reforms. Priorities include deepening trade and financial integration, improving labour productivity by reinvigorating structural transformation, reducing informality, advancing export sophistication, strengthening social safety nets, enhancing the business environment and governance, and advancing Thailand’s climate agenda.

Thailand: Selected Economic Indicators FY: 2020–2026:

Per capita GDP (2024): US$7,347; Exchange Rate (2024): 35.29 Baht/USD; Unemployment rate (2024): 01%; Poverty headcount ratio at national poverty line (2022): 5.4%; Net FDI (2024): US$ 6.95 billion; Population (2024): 71.67 million.

Team Maverick.