## IMF Staff Completes 2023 Article IV Mission to Thailand _IMF News, November 8, 2023_ ## Source details **Canonical URL:** [IMF Staff Completes 2023 Article IV Mission to Thailand](https://www.imf.org/en/news/articles/2023/11/08/pr23384-thailand-imf-staff-completes-2023-article-iv-mission) ## Other formats - [Markdown version](/en/news/articles/2023/11/08/pr23384-thailand-imf-staff-completes-2023-article-iv-mission/index.md) - [Structured JSON version](/en/news/articles/2023/11/08/pr23384-thailand-imf-staff-completes-2023-article-iv-mission/index.json) - [Bundle manifest](/en/news/articles/2023/11/08/pr23384-thailand-imf-staff-completes-2023-article-iv-mission/bundle-manifest.json) ## Bibliographic details - Published: November 8, 2023 --- ### Growth, inflation, and outlook - Thailand’s growth is projected at 2.7 percent in 2023, slightly higher than 2.6 percent in 2022. - Thailand’s economy expanded by 2.6 percent in 2022, and by 2.2 percent in the first half of 2023. - Growth is projected to increase to 3.6 percent in 2024, 0.4 percentage points higher than the IMF projection in mid-October. - Headline inflation is projected to average 1.3 percent in 2023. - Headline inflation is expected to slightly accelerate to 1.6 percent in 2024. - The recovery is expected to be gradual in 2023 and accelerate in 2024, amidst a highly uncertain global environment. - Downside risks prevail, including: heightened global uncertainty; prospects of tighter-for-longer global financial conditions; weakening global growth, including in China; and risks of sharp commodity prices fluctuations stemming from an escalation of the conflict in the Middle East. ### Recent drivers and near-term dynamics - The large increase in commodity prices since 2022, faster-than-expected monetary policy normalization in advanced economies, global financial turmoil, and the slowdown in China have slowed the recovery. - Contraction in investment and goods exports caused by the slowdown in external demand is expected to partially offset the robust private consumption growth following the tourism recovery. - Continued measures to keep energy prices low and further improvements in global supply chains helped lower inflation in 2023. ### Fiscal policy recommendations - Continued normalization of macroeconomic policies in the near term will help rebuild fiscal buffers and ensure financial stability. - A high-quality, gradual medium-term fiscal consolidation supported by enhanced revenue mobilization and improved spending efficiency will provide space for essential investments while keeping public debt on a sustainable downward path. - The Medium-Term Fiscal Framework (MTFF) remains an important guiding framework. - The mission recommends well-targeted support, within the budget envelope provided by the MTFF, to vulnerable groups such as Social Welfare Card holders that may not have benefited from the ongoing recovery. - Starting in FY25, a gradual, growth-friendly medium-term fiscal consolidation supported by enhanced revenue mobilization would create room for needed investment in infrastructure and skills while keeping public debt on a declining path. - Rationale for targeting: the growth multiplier of targeted measures is much higher than for universal transfers. ### Monetary policy and financial stability recommendations - The current neutral monetary policy stance is appropriate. - If inflationary risks from external shocks or domestic policies materialize, the Bank of Thailand (BOT) should stand ready to tighten the monetary stance further. - The BOT should continue to closely monitor financial stability risks as vulnerabilities may arise from sharp swings in real interest rates. - Authorities have continued the gradual tapering of pandemic-related financial sector support measures through 2022 and 2023. - The authorities should continue to strengthen the financial safety net and enhance the coverage of the macroprudential framework in line with the 2019 Financial Sector Assessment Program recommendations. - The mission welcomes the BOT's plans to introduce new measures to address high household debt, with a focus on responsible lending guidelines, while also assisting those with persistent debt issues. - The mission recommends proactive debt restructurings combined with the strengthening of the insolvency regime to contain elevated private debt going forward. ### Structural policies and long-term growth - Fully harnessing the benefits of the digital and green transformations, while mitigating the negative effects of geo-economic fragmentation and climate change will require comprehensive structural reforms. - Key reform priorities identified: - Enhancing competition and streamlining regulations. - Upskilling the labor force. - Increasing investments in digital infrastructure and research and development to boost productivity and move up value chains. - Implementing effective carbon pricing to help Thailand meet its climate goals. - The successful formation of the new government is an opportunity to implement decisive and comprehensive reforms to boost productivity and support sustained and inclusive growth. ### Mission process and acknowledgements - An IMF staff team, led by Ms. Corinne Deléchat, held the 2023 Article IV Consultation with Thailand between October 24 and November 7, 2023. - End-of-Mission press releases convey preliminary findings after a visit to a country; the views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board. - Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision. - The IMF team exchanged views on recent economic developments and the outlook with officials in the government, the BOT, other public institutions, and representatives of the private sector. *IMF Staff Completes 2023 Article IV Mission to Thailand — Press Release No. 23/384 (November 8, 2023).* --- ## References - [Thailand and the IMF](http://www.imf.org/external/country/THA/index.htm) - [IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance) - [Press Releases](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2023/11/08/pr23384-thailand-imf-staff-completes-2023-article-iv-mission_