IMF Staff Completes 2021 Article IV Mission to Thailand

IMF News, March 15, 2021

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Mission period: February 24–March 11.
End-of-Mission press release date: March 15, 2021.
IMF Executive Board tentatively scheduled to discuss the Staff Report in May 2021.
IMF staff team leader: Mr. Lamin Leigh.
Statement status: Views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.

Real GDP growth in 2020 contracted by 6.1 percent.
Quarter-to-quarter real GDP growth: Q3 2020 grew by 6.2 percent; Q4 2020 grew by 1.3 percent.
Growth is projected to reach 2.6 percent in 2021.
Recovery expectations:
- Recovery led by domestic demand.
- Recovery in tourism expected to be slow for most of 2021 and hinges partly on timely availability and distribution of an effective vaccine.
- Exports expected to pick up on a stronger recovery in global demand.
Inflation outlook: Forecast to recover somewhat in 2021, staying near the lower bound of the Bank of Thailand’s 1 to 3 percent target range.
Uncertainty: Outlook is high and hinges partly on the timely availability and distribution of an effective vaccine.

Authorities deployed a multi‑pronged policy package to manage pandemic risks and protect households, businesses, and the financial system, supported by prior ample policy buffers and judicious public finance management.
Mission recommendation on macroeconomic stance:
- Continue accommodative policies to support the recovery and reduce scarring.
- Avoid premature withdrawal of policy support until the recovery is secured.
- Fiscal expansion should focus on protecting the vulnerable and scaling up public investment in macro-critical and climate resilient projects.
- Once the recovery is firmly underway, implement a comprehensive consolidation strategy, including tax reforms and expenditure prioritization, to gradually restore pre‑crisis buffers and preserve fiscal sustainability over the medium term.
Monetary and financial sector recommendations:
- Provide targeted and more effective financial sector support to hard‑hit firms and households.
- Complement financial support with additional monetary easing in a data dependent manner.
- Authorities stand ready to implement additional financial measures, if necessary.
- Maintain exchange rate flexibility as a shock absorber to volatile capital flows.
- Use macroprudential policies to address possible financial stability risks.

Structural policies should:
- Limit economic scarring from the pandemic.
- Strengthen resilience of the economy.
- Promote inclusiveness.
Labor market:
- The pandemic has had a profound impact on the labor market, particularly in contact‑intensive sectors.
- Introduce active labor market policies in a coordinated fashion across government agencies to upskill workers dislocated by the pandemic.
Tourism and investment:
- Implement coordinated and multi‑pronged policies to shift to more sustainable tourism models over the medium term.
- Promote green investment.

The IMF team exchanged views with officials in the government, the Bank of Thailand, other public institutions, and representatives of the private sector.
The team thanked the authorities and other interlocutors in Bangkok for productive discussions.

IMF Staff Completes 2021 Article IV Mission to Thailand — Press Release No. 21/67 (March 15, 2021).