Thailand: Selected Issues

IMF Staff Country Reports, May 31, 2017

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Thailand: Selected Issues

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Bibliographic details

• Published: May 31, 2017
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9781484301845.002

Summary and analytical approach

• The paper analyzes factors that could bring inflation back to target in Thailand.
• Methodology: estimates a hybrid New Keynesian Phillips curve with time varying parameters to gauge the quantitative role of:
  • (long-term) inflation trends,
  • economic slack,
  • import price inflation

in shaping inflation dynamics.

Key findings

• The analysis reveals some important changes in Thailand’s inflation dynamics.
• The impact of lower import prices was a major factor behind the decline in headline inflation in 2015.
• Low oil prices were the largest contributor to inflation dynamics.

Policy implications and recommendations

• Monetary policy easing, within a broader expansionary policy mix, should help bring inflation back to target.

Subjects and keywords (as listed)

• Subject: Balance of payments, Current account, External balance assessment (EBA), External position, Inflation, International trade, National accounts, Prices, Private investment, Terms of trade
• Keywords: Asia and Pacific, CR, Current account, External balance assessment (EBA), Global, Inflation, inflation dynamics, inflation expectation, ISCR, monetary policy, Private investment, savings-investment perspective, Sub-Saharan Africa, Terms of trade, Thailand, Thailand's current account norm, trend inflation estimate

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