IMF Staff Completes 2025 Article IV Mission to Thailand

IMF News, November 14, 2025

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Recent economic indicators for the first half of 2025 surprised on the upside as Thailand’s economy expanded by 3 percent.
Growth projections:
- 2025: 2.1 percent
- 2026: 1.6 percent
Inflation outlook:
- Authorities’ target range: (1 to 3 percent)
- Average headline inflation projected at -0.1 percent in 2025 and 0.4 percent in 2026.
- Inflation is low and is expected to remain subdued, returning to the authorities’ target range (1 to 3 percent) only by 2027.
Key drivers noted:
- Exports recorded strong growth in H1 2025, reflecting accelerated shipments ahead of anticipated U.S. tariff hikes.
- Private consumption growth continued to slow.
- Private investment rebounded in Q2 after four consecutive quarters of contraction.
- Public consumption and investment recorded considerable growth, mainly due to budget under-execution in FY2024 following a delay in budget approval.

The outlook is uncertain with risks tilted to the downside.
Specific downside risks highlighted:
- Prolonged trade policy uncertainty could further weigh on growth and the inflation outlook.
- A prolonged decline in inflation could lower inflation expectations and lead to a broad-based and sustained decline in the price level.
- Heightened global financial market volatility could exacerbate domestic financial vulnerabilities.
- Escalating geopolitical tensions or protracted political uncertainty could further undermine confidence and growth.
Upside scenarios:
- A swift resolution of global trade tensions.
- Stronger-than-expected growth in trading partners.
- Prompt easing of domestic political uncertainty.

Given elevated public debt, fiscal support should remain targeted and parsimonious, underpinned by a credible medium-term consolidation strategy.
Short-term fiscal guidance:
- A moderate fiscal expansion envisaged in the current budget based on carryovers from the previous fiscal year could provide crucial near-term support.
- Available fiscal resources should be directed towards growth-enhancing activities, remain well-targeted, and be efficiently implemented to maximize impact.
- The mission welcomes the decision to redirect the planned Digital Wallet universal cash transfers toward investment projects, and top up social assistance for the State Welfare Card holders.
Medium-term fiscal guidance:
- Absent severe downside shocks, the authorities should avoid further delaying fiscal adjustment or raising the debt ceiling.
- Proceed with growth-friendly, revenue-driven consolidation to contain debt accumulation and create fiscal space for rising spending needs to invest in human and physical capital and strengthen social protection.

Monetary policy:
- The policy rate currently stands at 1.5 percent following four reductions totaling 100 basis points since October 2024.
- The shift to monetary easing remains appropriate, and there is scope to loosen further to mitigate downside risks to demand and inflation.
- Economic conditions suggest room for further monetary easing, supporting the recovery in domestic demand, while preserving adequate policy space against potential future shocks.
- Close coordination between monetary and fiscal policies is essential, while safeguarding central bank independence and maintaining exchange rate flexibility as a key shock absorber.
Financial sector and household debt:
- Given elevated household debt, measures to restore the impaired credit channel—including building on recent steps taken by the authorities—should continue to ensure effective monetary policy transmission.
- The authorities’ plans for continued orderly household debt deleveraging and support of SMEs are steps in the right direction.
- Priorities include restructuring low-value unsecured personal loans and enabling households to re-enter the formal credit system after successfully repaying a reduced amount or installments, with strong governance of the program.
- Expanding financial services to SMEs and other underserved groups will help strengthen financial intermediation and support economic growth.

Urgent structural reforms are needed to strengthen resilience and improve growth potential.
Key reform priorities:
- Deepening trade and financial integration.
- Reinvigorating structural transformation to boost labor productivity.
- Advancing export sophistication.
- Enhancing social protection, governance, and climate resilience.
Expected outcomes:
- These policies would support stronger and more inclusive growth and facilitate external rebalancing.

Mission head and dates:
- An IMF staff team, led by Mr. Peter Breuer, held the 2025 Article IV Consultation with Thailand between October 30 and November 13, 2025.
Additional context:
- U.S. tariffs, although reduced from the initially announced 36 to 19 percent, present a significant shock for the economy.
- Foreign tourist arrivals have declined.
- An unexpected change in government heightened uncertainty.
Process note:
- End-of-Mission press releases convey preliminary findings after a visit and reflect the views of IMF staff; 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’s Executive Board is tentatively scheduled to discuss the Staff Report in February 2026.

Source: IMF Staff Completes 2025 Article IV Mission to Thailand — November 13, 2025.