Thai Growth Seen Slowing, IMF Urges Easing and Targeted Spending

BANGKOK, Nov 14 (TNA) - Thailand’s economic growth is expected to slow significantly over the next two years, with GDP projected to decelerate to 2.1% in 2025 and further to 1.6% in 2026, the International Monetary Fund (IMF) warned following its 2025 Article IV Consultation. 

Although the economy expanded by 3% in the first half of 2025, better than initial estimates, the IMF noted that rising economic risks and persistent issues will weigh on the outlook. The Fund anticipates that inflation will remain low, only gradually returning to the central bank’s 1-3% target range by 2027. Given these challenges and limited policy space, the IMF advises Thai authorities to implement a cautious, carefully blended policy strategy.

The IMF recommends two key policy actions: the current accommodative monetary policy remains appropriate, and there is scope for further easing to mitigate downside risks to demand and inflation. 

On the fiscal side, the IMF stressed that authorities must use targeted and cautious fiscal policy due to high public debt, and must establish a credible medium-term fiscal consolidation strategy to maintain sustainability. Additionally, the Fund called for accelerated efforts to address high household debt to restore credit channels and enhance the effectiveness of monetary policy transmission. 

Thai authorities have indicated they are taking continuous measures for stimulus and structural reform, and concurred with the IMF on the need for careful policy management and structural changes to support sustainable growth. -819 (TNA)