{
  "title": "Public Information Notice: IMF Concludes 2003 Article IV Consultation with Thailand",
  "publication": "IMF News, September 17, 2003",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/53/pn03119",
  "canonical": "https://www.imf.org/en/news/articles/2015/09/28/04/53/pn03119",
  "overlayPath": "/en/news/articles/2015/09/28/04/53/pn03119/index.md",
  "summary": "Each Public Information Notice contains a background section, a table of selected economic indicators, and an Executive Board assessment.",
  "publishDate": "2003-09-17",
  "sections": [
    {
      "heading": "Background",
      "content": "- Executive Board concluded the Article IV consultation with Thailand on August 25, 2003.\n- Thailand completed a 34-month, SDR 2.9 billion (268 percent of quota, equivalent to US$4 billion) Stand-By Arrangement on June 19, 2000.\n- The arrangement was part of a $17.2 billion official financing package from multilateral institutions and bilateral contributors, $14.3 billion of which was drawn.\n- Thailand completed repayment of this package on July 31, 2003, some two years ahead of schedule."
    },
    {
      "heading": "Economic performance and recent developments",
      "content": "- Real GDP growth:\n  - 2002: Real GDP increased by 5.3 percent.\n  - Q1 2003: 6.7 percent (year-on-year).\n- Inflation:\n  - Core inflation has hovered around 0.2 percent since the second half of 2002 (BOT target range: 0-3½ percent).\n  - Headline inflation trended down after cresting at about 2 percent in January 2003.\n- Monetary policy:\n  - Bank of Thailand (BOT) cut its policy rate in January and November 2002, and again in June 2003.\n  - Deposit and lending rates have declined recently and could fall further.\n- Fiscal policy:\n  - Fiscal year ended September 2002 (FY 2001/02): fiscal policy provided timely countercyclical support.\n  - Current fiscal year: general government balance expected to improve by 2.1 percent of GDP, due mostly to stronger-than-expected revenues.\n  - Quasi-fiscal initiatives: expanded operations of state-owned specialized financial institutions (SFIs) aimed at boosting credit and home ownership.\n- External sector:\n  - Export performance was very strong in 2002; current account projected to remain in surplus in 2003.\n  - Official gross reserves stood at over US$39 billion at end-June 2003.\n  - SET index: increased about 17 percent in 2002, and over 30 percent more through June 2003.\n  - Bond yields are low and major credit rating agencies share a positive outlook for the sovereign rating.\n- Financial sector and corporate sector:\n  - Corporate balance sheets improved somewhat through de-leveraging but remain fragile.\n  - Banks' financial positions improving but need further strengthening.\n  - Lending activity has gathered steam, mostly at state-owned institutions.\n  - Resolution of nonperforming loans (NPLs) at private banks continues to be slow.\n  - Thai Asset Management Corporation (TAMC) met targets for resolving NPLs in 2002, but many approved restructurings or foreclosures remain incomplete."
    },
    {
      "heading": "Executive Board assessment — findings and recommendations",
      "content": "- Commendations and outlook:\n  - Directors commended authorities for sound policies contributing to strong growth in 2002 and early 2003.\n  - Directors welcomed the early repayment of the 1997 financing package and reduced vulnerability to external shocks.\n  - Directors considered growth in the remainder of 2003 is likely to be strong.\n- Structural reforms and financial sector:\n  - Stronger medium-term growth prospects depend on intensifying structural reforms, especially in corporate and banking sectors.\n  - Directors welcomed efforts to restructure the banking sector and encouraged accelerating the pace of restructuring.\n  - Encouraged Bank of Thailand to use regulatory powers to resolve weak banks (mandated capital increases or consolidation).\n  - Directors noted TAMC progress but urged improved disclosure on restructuring cases, cash recovery, and asset disposal.\n- Fiscal policy and public finances:\n  - Directors agreed fiscal policy played an appropriate counter-cyclical role in 2002 and supported a shift to a more contractionary stance for the current fiscal year.\n  - Noted fiscal consolidation in the first half of the fiscal year proceeded faster than intended due to strong revenue growth and lower-than-targeted spending from temporary disruptions.\n  - Welcomed move to bring spending toward budgeted levels, particularly to offset SARS effects.\n  - Emphasized medium-term fiscal adjustment to reduce the debt-to-GDP ratio and minimize potential impacts of financial sector restructuring, contingent liabilities, and fiscal decentralization plans.\n  - Recommended reassessing the timeline for decentralization and target rate for related revenue transfers to local authorities, stressing the need for adequate administrative capacity at the local level.\n  - Welcomed medium-term plans for broad tax reform to enhance efficiency and support revenues.\n  - Recommended making the fiscal framework more responsive, transparent, and flexible; reduce incentives to place activities outside the budget.\n- Specialized financial institutions (SFIs) and quasi-fiscal activities:\n  - Noted potential impact of quasi-fiscal activities on medium-term fiscal consolidation objectives.\n  - Welcomed authorities' intention to better record policy-related activities of SFIs through improved accounting procedures.\n  - Stressed importance of keeping SFIs' operations within narrowly defined mandates and bringing policy-related activities within the official budget to improve transparency and accountability.\n  - Recommended speedy implementation of plans to enhance supervisory and regulatory oversight of commercially-oriented SFI operations.\n- Inflation, exchange rate, and monetary policy stance:\n  - Noted limited deflation risks but vulnerability due to very low inflation.\n  - Welcomed BOT's decision to cut the policy interest rate as insurance against deflation risks and to reinforce credibility of inflation targeting framework.\n  - Considered an easing bias would remain appropriate.\n  - Most Directors suggested BOT consider raising the floor of its inflation target range above zero to anchor inflation expectations at a positive level.\n  - Supported a largely market-determined exchange rate in current circumstances; interventions should be limited to smoothening short-term volatility.\n- State-owned banks and privatization:\n  - Observed rapid lending growth by state-owned banks could reflect either need for level playing field or unwarranted risk-taking.\n  - Urged vigilant monitoring of state banks to ensure commercial operations with appropriate risk-management.\n  - Privatization of state banks would be welcome to help ensure financial sector competitiveness.\n- Legal and institutional reforms:\n  - Encouraged authorities to press forward with legal reforms, including improved bankruptcy procedures and a predictable debt restructuring framework balancing interests of debtors and creditors.\n  - Urged enactment of pending financial sector legislation as quickly as possible.\n  - Welcomed intention to assess compliance with international standards and codes, especially data and corporate governance.\n  - Noted that a Report on the Observance of Standards and Codes on fiscal transparency and a Financial Sector Assessment Program would help identify measures to improve fiscal flexibility and the legislative/regulatory financial framework.\n- Anti–money laundering:\n  - Welcomed adoption of the Emergency Decree stipulating terrorism as a predicated offense under the Thai Anti-Money Laundering Act."
    },
    {
      "heading": "Thailand: Selected Economic Indicators, 1998-2003 (key figures)",
      "content": "- Real GDP growth (percent):\n  - 1998: -10.5\n  - 1999: 4.4\n  - 2000: 4.6\n  - 2001: 1.9\n  - 2002: 5.3\n  - 2003 Proj.: 5.0\n- Consumption (percent):\n  - 1998: -9.5\n  - 1999: 4.1\n  - 2000: 4.5\n  - 2001: 3.6\n  - 2002: 4.3\n  - 2003: (no figure given)\n- CPI inflation (period average, percent):\n  - 1998: 8.1\n  - 1999: 0.3\n  - 2000: 1.6\n  - 2001: 1.7\n  - 2002: 0.6\n  - 2003: 1.3\n- Saving and investment (percent of GDP):\n  - Gross domestic investment:\n    - 1998: 20.4\n    - 1999: 20.5\n    - 2000: 22.7\n    - 2001: 23.9\n    - 2002: 23.8\n    - 2003: 25.8\n  - Gross national saving:\n    - 1998: 33.2\n    - 1999: 30.7\n    - 2000: 30.3\n    - 2001: 29.3\n    - 2002: 29.9\n    - 2003: 31.0\n- Fiscal accounts (percent of GDP) 1/:\n  - Budgetary central government balance:\n    - 1998: -2.4\n    - 1999: -3.5\n    - 2000: -2.9\n    - 2001: -2.8\n    - 2002: -0.8\n    - 2003: (no figure given)\n  - Revenue and grants:\n    - 1998: 16.2\n    - 1999: 15.5\n    - 2000: 15.0\n    - 2001: 15.8\n    - 2002: 16.3\n    - 2003: (no figure given)\n  - Expenditure and net lending:\n    - 1998: 18.7\n    - 1999: 18.9\n    - 2000: 18.4\n    - 2001: 17.9\n    - 2002: 18.6\n    - 2003: 17.0\n  - General government balance 2/:\n    - 1998: -2.5\n    - 1999: -3.1\n    - 2000: -1.3\n    - 2001: -1.7\n    - 2002: 0.4\n    - 2003: (no figure given)\n  - Nonfinancial public enterprise balance:\n    - 1998: -1.4\n    - 1999: -2.0\n    - 2000: -0.9\n    - 2001: 0.8\n    - 2002: 0.1\n    - 2003: (no figure given)\n  - Comprehensive public sector balance:\n    - 1998: -6.4\n    - 1999: -6.0\n    - 2000: -4.1\n    - 2001: -3.0\n    - 2002: -0.5\n    - 2003: (no figure given)\n- Monetary accounts (end period, percent):\n  - M2A growth 3/:\n    - 1998: 7.1\n    - 1999: 2.2\n    - 2000: -0.1\n    - 2001: ... (no figure given)\n- Balance of payments (billions of US$):\n  - Current account balance:\n    - 1998: 14.3\n    - 1999: 12.5\n    - 2000: 9.3\n    - 2001: 6.2\n    - 2002: 7.6\n    - 2003: 6.9\n  - Current account (Percent of GDP):\n    - 1998: 12.8\n    - 1999: 10.2\n    - 2000: 5.4\n    - 2001: 6.0\n  - Exports, f.o.b.:\n    - 1998: 52.9\n    - 1999: 56.8\n    - 2000: 67.9\n    - 2001: 63.2\n    - 2002: 66.8\n    - 2003: 76.3\n  - Imports, c.i.f.:\n    - 1998: 40.6\n    - 1999: 47.5\n    - 2000: 62.4\n    - 2001: 60.7\n    - 2002: 63.4\n    - 2003: 73.2\n  - Services account, net:\n    - 1998: 2.8\n    - 1999: 3.3\n    - 2000: 3.1\n  - Capital account balance 4/:\n    - 1998: -13.2\n    - 1999: -8.2\n    - 2000: -10.8\n    - 2001: -3.6\n    - 2002: -2.1\n    - 2003: -8.5\n  - Overall balance:\n    - 1998: 1.1\n    - 1999: 2.6\n    - 2000: 5.6\n    - 2001: -1.6\n- Gross official reserves (end year, US$ billions):\n  - 1998: 29.5\n  - 1999: 34.8\n  - 2000: 32.7\n  - 2001: 33.0\n  - 2002: 38.9\n  - 2003: 36.9\n  - (end-June 2003 official gross reserves noted as over US$39 billion in text)\n- Gross official reserves (Percent of maturing external debt):\n  - 1998: 77.6\n  - 1999: 122.7\n  - 2000: 119.1\n  - 2001: 127.0\n  - 2002: 150.8\n  - 2003: 177.8\n- External debt (billions of US$):\n  - 1998: 105.1\n  - 1999: 95.1\n  - 2000: 79.7\n  - 2001: 67.5\n  - 2002: 59.5\n  - 2003: 49.4\n- Public sector / Private sector external debt (percent of external debt):\n  - Public sector:\n    - 1998: 31.6\n    - 1999: 36.2\n    - 2000: 33.9\n    - 2001: 28.3\n    - 2002: 23.3\n    - 2003: (no figure given)\n  - Private sector:\n    - 1998: 73.5\n    - 1999: 58.8\n    - 2000: 45.8\n    - 2001: 39.2\n    - 2002: (no figure given)\n- Debt service ratio 5/:\n  - 1998: 21.8\n  - 1999: 19.8\n  - 2000: 21.1\n\nSources: Information provided by the Thai authorities; and IMF staff estimates. Historical data may not be identical to that on the BOT website due to different rounding conventions.\n\nPublic Information Notice: IMF Concludes 2003 Article IV Consultation with Thailand — September 17, 2003; IMF EXTERNAL RELATIONS DEPARTMENT, Public Affairs, Media Relations.\n\n---\n\n Content in this bundle\n\n- Pn03119tpdf (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- Thailand and the IMF\n- Public Information Notices\n- Article IV\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/53/pn03119"
    }
  ],
  "bullets": [
    "[Markdown version](/en/news/articles/2015/09/28/04/53/pn03119/index.md)",
    "[Structured JSON version](/en/news/articles/2015/09/28/04/53/pn03119/index.json)",
    "[Bundle manifest](/en/news/articles/2015/09/28/04/53/pn03119/bundle-manifest.json)",
    "Published: September 17, 2003",
    "Executive Board concluded the Article IV consultation with Thailand on August 25, 2003.",
    "Thailand completed a 34-month, SDR 2.9 billion (268 percent of quota, equivalent to US$4 billion) Stand-By Arrangement on June 19, 2000.",
    "The arrangement was part of a $17.2 billion official financing package from multilateral institutions and bilateral contributors, $14.3 billion of which was drawn.",
    "Thailand completed repayment of this package on July 31, 2003, some two years ahead of schedule.",
    "Real GDP growth:",
    "Inflation:",
    "Monetary policy:",
    "Fiscal policy:",
    "External sector:",
    "Financial sector and corporate sector:",
    "Commendations and outlook:",
    "Structural reforms and financial sector:",
    "Fiscal policy and public finances:",
    "Specialized financial institutions (SFIs) and quasi-fiscal activities:",
    "Inflation, exchange rate, and monetary policy stance:",
    "State-owned banks and privatization:",
    "Legal and institutional reforms:",
    "Anti–money laundering:",
    "Real GDP growth (percent):",
    "Consumption (percent):",
    "CPI inflation (period average, percent):",
    "Saving and investment (percent of GDP):",
    "Fiscal accounts (percent of GDP) 1/:",
    "Monetary accounts (end period, percent):",
    "Balance of payments (billions of US$):",
    "Gross official reserves (end year, US$ billions):",
    "Gross official reserves (Percent of maturing external debt):",
    "External debt (billions of US$):",
    "Public sector / Private sector external debt (percent of external debt):",
    "Debt service ratio 5/:",
    "[Pn03119tpdf (PDF)](/-/media/websites/imf/imported/external/np/sec/pn/2003/tha/_pn03119tpdf.pdf){rel=\"external\" type=\"application/pdf\"}",
    "[Thailand and the IMF](http://www.imf.org/external/country/THA/index.htm)",
    "[Public Information Notices](https://www.imf.org/en/news/searchnews)",
    "[Article IV](https://www.imf.org/external/pubs/ft/aa/aa04.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
  ],
  "related": [
    {
      "title": "Pn03119tpdf",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported/external/np/sec/pn/2003/tha/_pn03119tpdf.pdf",
      "binary": {
        "path": "/-/media/websites/imf/imported/external/np/sec/pn/2003/tha/_pn03119tpdf.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/news/articles/2015/09/28/04/53/pn03119/index.md",
    "json": "/en/news/articles/2015/09/28/04/53/pn03119/index.json",
    "bundleManifest": "/en/news/articles/2015/09/28/04/53/pn03119/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-27T02:02:53.380Z"
}