{
  "title": "Public Information Notice: IMF Concludes 2004 Article IV Consultation with Thailand",
  "publication": "IMF News, December 1, 2004",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/53/pn04133",
  "canonical": "https://www.imf.org/en/news/articles/2015/09/28/04/53/pn04133",
  "overlayPath": "/en/news/articles/2015/09/28/04/53/pn04133/index.md",
  "summary": "Each Public Information Notice contains a background section, a table of selected economic indicators, and an Executive Board assessment.",
  "publishDate": "2004-12-01",
  "sections": [
    {
      "heading": "Background: recent macroeconomic developments and policy actions",
      "content": "- Real GDP expanded by 6.8 percent in 2003; growth momentum continued but the economy slowed in Q1 2004 due to avian flu and a contraction of agricultural activity.\n- Inflation:\n  - Core inflation close to zero (year-on-year) in 2003.\n  - Core inflation at 0.5 percent and headline inflation at 3 percent in June 2004.\n- Monetary policy:\n  - Bank of Thailand (BOT) cut its policy rate by 50 basis points (to 1.25 percent) in June 2003.\n  - In fall 2003 BOT imposed selective capital controls to limit speculative inflows while relaxing controls on outflows.\n- Financial sector and markets:\n  - Measures taken in 2003 to prevent financial imbalances in the stock market, housing market, and consumer lending (tighter regulations on credit cards, real estate lending, and share trading).\n  - Average debt to equity ratio for nonfinancial companies fell to 1 in 2003; some large corporates remain overleveraged.\n  - NPLs at Thai private banks declined from 21 percent in June 2003 to 15 percent in June 2004.\n  - Credit growth has mostly come from state-owned banks.\n  - The Thai Asset Management Corporation continues progress on resolving NPLs but significant efforts remain.\n- Fiscal position:\n  - Central government recorded a small surplus in FY 2002/03.\n  - A supplementary budget of around 2 percent of GDP was passed in FY 2003/04 as revenue projections were revised upward.\n  - Central government expected to have a broadly balanced budget in FY 2003/04.\n- External position:\n  - Current account recorded a surplus of 5½ percent of GDP in 2003.\n  - At end-June 2004, reserves were US$43 billion, equivalent to over 200 percent of end-2003 short-term debt.\n  - External debt to GDP declined by 11 percentage points in 2003 to 36 percent.\n  - The baht appreciated by around 10 percent (year-on-year) against the dollar in 2003, but depreciated slightly in real effective terms; in the first half of 2004 the baht depreciated by around 3 percent against the U.S. dollar."
    },
    {
      "heading": "Executive Board assessment: judgment and policy recommendations",
      "content": "- Overall appraisal:\n  - Directors commended authorities for sound policies contributing to continued strong performance despite shocks to tourism and agriculture.\n  - Noted low inflation, trending downward unemployment, a fiscal surplus, and broadly favorable financial market developments.\n- Growth outlook and risks:\n  - Foundations for continued near-term growth likely to remain strong.\n  - Vulnerability to external shocks reduced by flexible exchange rate, lower external debt, and comfortable reserves.\n  - Downside risks remain; sustained high growth would be strengthened by further structural and legal reforms.\n- Monetary policy and exchange rate:\n  - Directors endorsed proactive monetary policy to adapt to emerging price pressures.\n  - Welcomed BOT decision to increase policy rate to contain inflation risks; urged a cautious forward-looking approach given uncertainties and the relatively untested inflation targeting framework.\n  - Supported two-way exchange rate flexibility; acknowledged that selective intervention and capital controls helped contain volatility but cautioned against one-sided intervention and prolonged use of capital controls.\n  - Warned that continued sterilized intervention amid rising inflation would complicate monetary policy; recommended greater exchange rate flexibility to align monetary policy with domestic developments.\n- Fiscal policy:\n  - Considered the current fiscal year budget broadly appropriate; cautioned against fiscal stimulus at this stage.\n  - Welcomed shift to a neutral fiscal stance for the upcoming fiscal year.\n  - Stressed that medium-term fiscal adjustment remains a priority; running modest budgetary surpluses over the cycle would improve debt dynamics and build a fiscal cushion.\n  - Urged careful costing and sequencing of infrastructure upgrades and cautious fiscal decentralization with attention to budgetary impacts and quality of public services.\n  - Emphasized strengthening transparency in financing of policy initiatives and quasi-fiscal activities; welcomed introduction of the public service account system.\n- Financial sector and corporate restructuring:\n  - Called for further progress in corporate and banking sector restructuring to underpin a durable pickup in investment.\n  - Encouraged acceleration of amendments to the legislative framework for market-based transfer of nonperforming loans to the Asset Management Corporation.\n  - Recommended greater disclosure by the Thailand Asset Management Corporation, including cash recovery targets and progress metrics.\n  - Urged state-owned commercial banks to operate on commercial principles and stronger supervisory oversight of all state-owned financial institutions.\n  - Recommended regulators address risks from new financial products and enhance supervision of non-bank and specialized financial institutions.\n  - Welcomed planned Financial Sector Assessment Program and suggested early participation in data and fiscal Reports on Standards and Codes (ROSCs).\n- Structural and governance reforms:\n  - Encouraged legal reforms to improve public and corporate governance; commended commitment to assess corporate governance under the ROSC initiative.\n  - Advised reform of the bankruptcy framework and enactment of other important economic laws.\n  - Welcomed intention to reinvigorate privatization and urged acceleration of regulatory reforms to support privatization.\n- Trade policy:\n  - Noted progress in trade liberalization and suggested further streamlining of the tariff system, including replacing specific duties with ad valorem rates.\n  - Observed bilateral and regional FTAs could improve the domestic business climate and market access, and encouraged consistency with multilateral trade liberalization goals.\n- Social outcomes:\n  - Commended authorities for considerable progress in reducing poverty in Thailand."
    },
    {
      "heading": "Thailand: selected economic indicators (highlights from 1999–2004 series and 2004 projections)",
      "content": "- Real GDP growth:\n  - 1999: 4.4\n  - 2000: 4.8\n  - 2001: 2.1\n  - 2002: 5.4\n  - 2003: 6.8\n  - 2004 Est./Proj.: 6.5\n- Inflation (period average):\n  - Headline CPI:\n    - 1999: 0.3\n    - 2000: 1.6\n    - 2001: 0.7\n    - 2002: 1.8\n    - 2003: 2.7\n  - Core CPI:\n    - 1999: 1.3\n    - 2000: 0.4\n    - 2001: 0.1\n    - 2003: (close to zero); 2004 (June): 0.5 percent (from narrative)\n- Fiscal accounts (percent of GDP):\n  - Budgetary central government balance:\n    - 1999: -3.5\n    - 2000: -2.9\n    - 2001: -2.8\n    - 2002: 0.2\n    - 2003: -0.1\n  - Revenue and grants:\n    - 1999: 15.5\n    - 2000: 15.0\n    - 2001: 15.7\n    - 2002: 16.6\n    - 2003: 17.0\n  - Expenditure and net lending:\n    - 1999: 18.9\n    - 2000: 18.4\n    - 2001: 17.9\n    - 2002: 18.5\n    - 2003: 16.4\n    - 2004: 17.2\n  - General government balance:\n    - 1999: -3.1\n    - 2000: -2.5\n    - 2001: -1.2\n    - 2002: -1.7\n    - 2003: 1.5\n    - 2004: 1.1\n  - Comprehensive public sector balance:\n    - 1999: -6.0\n    - 2000: -4.1\n    - 2001: -2.0\n    - 2002: -3.0\n    - 2003: 0.8\n    - 2004: 0.9\n  - Public sector debt:\n    - 1999: 56.0\n    - 2000: 57.9\n    - 2001: 57.3\n    - 2002: 57.1\n    - 2003: 50.5\n    - 2004: 48.2\n- Monetary accounts (end-period):\n  - M2A growth:\n    - 1999: 2.2\n    - 2000: 5.1\n    - 2001: 3.5\n    - 2004 figures are percentage changes March 2004 over December 2003 (note in source).\n- Balance of payments (in billions of U.S. dollars, unless otherwise indicated):\n  - Current account balance (1999–2004):\n    - 1999: 12.5\n    - 2000: 9.3\n    - 2001: 6.2\n    - 2002: 7.0\n    - 2003: 8.0\n    - 2004: 6.4\n  - Exports, f.o.b.:\n    - 1999: 56.8\n    - 2000: 67.9\n    - 2001: 63.1\n    - 2002: 66.1\n    - 2003: 78.4\n    - 2004: 92.7\n  - Imports, c.i.f.:\n    - 1999: 47.5\n    - 2000: 62.4\n    - 2001: 60.6\n    - 2002: 63.4\n    - 2003: 74.2\n    - 2004: 90.9\n  - Capital and financial account balance:\n    - 1999: -8.2\n    - 2000: -10.8\n    - 2001: -3.6\n    - 2002: -1.4\n    - 2003: -7.4\n    - 2004: -4.4\n  - Overall balance:\n    - 1999: 4.3\n    - 2000: 2.6\n    - 2001: 0.5\n    - 2002: 2.0\n  - Gross official reserves (end-year):\n    - 1999: 34.8\n    - 2000: 32.7\n    - 2001: 33.0\n    - 2002: 38.9\n    - 2003: 42.1\n    - 2004: 44.1\n  - Reserves as percent of maturing external debt:\n    - 1999: 122.7\n    - 2000: 119.1\n    - 2001: 121.2\n    - 2002: 154.5\n    - 2003: 210.6\n    - 2004: 223.6\n- External debt:\n  - As percent of GDP:\n    - 1999: 77.6\n    - 2000: 65.0\n    - 2001: 58.5\n    - 2002: 47.0\n    - 2003: 36.2\n    - 2004: 28.6\n  - In billions of U.S. dollars:\n    - 1999: 95.1\n    - 2000: 79.7\n    - 2001: 67.5\n    - 2002: 59.5\n    - 2003: 51.7\n    - 2004: 46.5\n  - Public sector external debt (as percent of total external debt):\n    - 1999: 33.9\n    - 2000: 28.3\n    - 2001: 23.3\n    - 2002: 13.0\n    - 2003: (data line continues in source)\n  - Private sector external debt (as percent of total external debt):\n    - 1999: 58.8\n    - 2000: 45.8\n    - 2001: 39.2\n    - 2002: 34.7\n    - 2003: 33.5\n  - Debt-service ratio (percent of exports of goods and services):\n    - 1999: 19.8\n    - 2000: 15.8\n    - 2001: 21.1\n    - 2002: 20.0\n    - 2003: 16.1\n    - 2004: 9.5\n\nPublic Information Notice: IMF Concludes 2004 Article IV Consultation with Thailand — December 1, 2004.\n\n---\n\n Content in this bundle\n\n- Pn04133tpdf (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/pn04133"
    }
  ],
  "bullets": [
    "[Markdown version](/en/news/articles/2015/09/28/04/53/pn04133/index.md)",
    "[Structured JSON version](/en/news/articles/2015/09/28/04/53/pn04133/index.json)",
    "[Bundle manifest](/en/news/articles/2015/09/28/04/53/pn04133/bundle-manifest.json)",
    "Published: December 1, 2004",
    "Real GDP expanded by 6.8 percent in 2003; growth momentum continued but the economy slowed in Q1 2004 due to avian flu and a contraction of agricultural activity.",
    "Inflation:",
    "Monetary policy:",
    "Financial sector and markets:",
    "Fiscal position:",
    "External position:",
    "Overall appraisal:",
    "Growth outlook and risks:",
    "Monetary policy and exchange rate:",
    "Fiscal policy:",
    "Financial sector and corporate restructuring:",
    "Structural and governance reforms:",
    "Trade policy:",
    "Social outcomes:",
    "Real GDP growth:",
    "Inflation (period average):",
    "Fiscal accounts (percent of GDP):",
    "Monetary accounts (end-period):",
    "Balance of payments (in billions of U.S. dollars, unless otherwise indicated):",
    "External debt:",
    "[Pn04133tpdf (PDF)](/-/media/websites/imf/imported/external/np/sec/pn/2004/tha/_pn04133tpdf.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": "Pn04133tpdf",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported/external/np/sec/pn/2004/tha/_pn04133tpdf.pdf",
      "binary": {
        "path": "/-/media/websites/imf/imported/external/np/sec/pn/2004/tha/_pn04133tpdf.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/news/articles/2015/09/28/04/53/pn04133/index.md",
    "json": "/en/news/articles/2015/09/28/04/53/pn04133/index.json",
    "bundleManifest": "/en/news/articles/2015/09/28/04/53/pn04133/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-27T02:28:44.245Z"
}