IMF Staff Concludes 2017 Article IV Visit to Thailand

IMF Staff Concludes 2017 Article IV Visit to Thailand

An International Monetary Fund (IMF) team, led by Ana Corbacho, visited Bangkok from February 16–March 1, 2017, for the 2017 Article IV Consultation discussions. The team exchanged views on recent economic developments and the outlook with officials in the government, the Bank of Thailand (BOT), and other public institutions. It also met with representatives of the private sector and academics. At the conclusion of the visit, Ms. Corbacho issued the following statement:
“The Thai economy continued to recover in 2016. GDP growth reached 3.2 percent, mainly driven by exports of services and public investment. Average headline inflation was 0.2 percent, below the target band for the second year in a row, reflecting low energy prices and persistently weak core inflation. Amid subdued import growth, the external current account strengthened further. Financial markets were highly resilient in the face of external and domestic shocks.


The recovery is expected to advance at a moderate pace in the near to medium term. Public investment would remain a key driver, rising over the next few years in line with the government’s infrastructure plans, and crowding in private investment. Headline inflation is projected to increase in 2017 along with higher energy prices, but would remain below the 2.5 percent target for several years, amid subdued core inflation. The current account surplus is expected to decline gradually, as domestic demand improves over the medium term.
The team agrees on the need for structural reforms to anchor sustained, inclusive growth. Concerted reforms should address all drivers of potential growth, with priority placed on the challenges brought about by the fast pace of population aging. Promoting labor force participation (including by closing gender gaps and increasing the retirement age), facilitating skilled migration, and improving the quality of education would help raise labor productivity and mitigate the drag from demographics”.
Press-release at the official IMF web-site