Thailand: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Thailand

2024ARTICLE IV CONSULTATION—PRESS RELEASE;STAFF REPORT; AND STATEMENT BY THE EXECUTIVEDIRECTOR FORTHAILAND Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussionswith members, usually every year. In the context of the2024Article IV consultation withThailand, the following documents have been released and are included in this package: •APress Release. •TheStaff Reportprepared by a staff team of the IMF for the Executive Board’sconsideration onlapse-of-time basis, following discussions that ended onNovember 26, 2024, with the officials ofThailandon economic developments andpolicies. Based on information available at the time of these discussions, the staffreport was completed onJanuary 27, 2025. •AnInformational Annexprepared by the IMFstaff. •AStatement by the Executive DirectorforThailand. The documents listed below will be separately released. Selected Issues TheIMF’s transparency policy allows for the deletion of market-sensitive information andpremature disclosure of the authorities’ policy intentions in published staff reports andother documents. Copies of this report are available to the public from International Monetary Fund•Publication ServicesPO Box 92780•Washington, D.C. 20090Telephone: (202) 623-7430•Fax: (202) 623-7201E-mail:publications@imf.org Web:http://www.imf.org International Monetary FundWashington, D.C. IMF Executive Board Concludes 2024 Article IV Consultationwith Thailand FOR IMMEDIATE RELEASE Washington, DC–February 20, 2025:On February 11, The Executive Board of theInternational Monetary Fund (IMF) concluded the Article IV consultation1with Thailand andendorsed the staff appraisal without a meeting on a lapse-of-time basis. Thailand’s economy is gradually recovering, but at a slower pace than peers. Economicactivity expanded modestly by 1.9 percent in 2023 and 2.3 percent in the first three quarters of2024, driven by private consumption growth and a rebound in tourism. Inflation remainedsubdued, averaging 0.4 percent (y/y) annually in 2024, well below the Bank of Thailand’starget range of 1 to 3 percent. External factors such as the decline in global energy and foodprices, lower import prices have played a role, but domestic factors such as energy subsidies,price controls, and the unwinding of pandemic-related fiscal support have also contributed tothe lower inflation. The current account balance strengthened to 1.4 percent of GDP in 2023,from -3.5 percent of GDP in 2022, and continues to register a moderate surplus as ofNovember 2024, supported by the continued recovery in tourism and higher exports. A gradual cyclical recovery is expected to continue. Real GDP is projected to grow by 2.7percent in 2024 and to increase to 2.9 percent in 2025. This is underpinned by theexpansionary fiscal stance envisaged under the 2025 budget, which includes additional cashtransfers of 1.0 percent of GDP and a rebound in public investment. Tourism-related sectorsare expected to continue to support growth, as well as private consumption that will be furtherboosted by the authorities’ cash transfers. As growth continues to firm up, inflation is expectedto pick up but remain in the bottom half of the target range in 2025. The current accountbalance is expected to improve further in 2024 and 2025, driven by the ongoing recovery intourist arrivals. Risks to Thailand’s economic outlook are tilted to the downside. On the external front, anescalation of global trade tensions or deepening geoeconomic fragmentation could disruptThailand’s export recovery and dampen FDI inflows, while increased commodity price volatilitycould affect growth and lead to inflation spikes, and potentially tighter-for-longer globalfinancial conditions. The intensification of regional conflicts could disrupt trade and travel flowswhile more frequent extreme climate events would adversely impact growth prospects. On thedomestic front, the private sector debt overhang could impair financial institutions’ balancesheets and further decrease credit supply, negatively affecting growth. Renewed politicaluncertainty could hinder policy implementation and undermine confidence. Executive Board Assessment2 In concluding the 2024 Article IV consultation with Thailand, Executive Directors endorsedthe staff’s appraisal, as follows: Thailand’s economic recovery is ongoing, but it has been relatively slow and uneven.Economic activity expanded modestly in 2024, driven by private consumption and a reboundin tourism-related activities, while delayed budget implementation slowed the pace of publicinvestment. The slow recovery, compared to ASEAN peers, is also rooted in Thailand’slongstanding structural weaknesses, while emerging external and domestic headwinds havealso contributed to subdued inflation. The outlook remains highly uncertain with significantdownside risks. As economic slack narrows, the focus should shift to rebuilding fiscal space. A lessexpansionary fiscal stance than envisaged under