IMF projects Thailand’s growth to slow further, urges targeted reforms to boost recovery
The IMF's latest assessment of Thailand’s economy highlights slower growth, fiscal challenges, and the need for targeted reforms to support recovery amid external headwinds.
On February 12, 2026, the International Monetary Fund (IMF) Executive Board completed its Article IV Consultation for Thailand, and the authorities have agreed to the publication of the Staff Report prepared for this consultation.
Thailand’s economic growth is estimated to have slowed from 2.5% in 2024 to 2.1% in 2025, primarily due to increasing external and domestic challenges, including trade policy uncertainty, constrained credit growth, and a slower recovery in foreign tourism. Despite subdued inflation, largely due to lower energy and food prices, credit growth remains constrained, and financial conditions continue to tighten. Nevertheless, Thailand’s external stability remains strong, bolstered by substantial international reserves and manageable external debt levels.
The authorities have responded to these challenges by implementing targeted fiscal measures, easing monetary policy, facilitating household debt restructuring, and providing liquidity support to small and medium-sized enterprises (SMEs). These efforts are aimed at protecting vulnerable groups and boosting consumption, as well as strengthening fiscal discipline.
Looking ahead, the IMF forecasts that Thailand’s growth will moderate further to 1.6% in 2026, as external pressures persist and domestic demand remains weak. The risks to the outlook are tilted to the downside, with ongoing trade policy uncertainty, global financial market volatility, and domestic political developments all posing potential threats. However, the IMF suggests that a swift resolution of trade tensions or a reduction in domestic uncertainty could help stimulate growth.
IMF Executive Board Assessment
The IMF’s Executive Directors acknowledged that Thailand’s economy has demonstrated resilience in an uncertain global environment but is now facing mounting challenges. They stressed the importance of a well-calibrated policy mix, building on recent reform momentum, to support recovery while maintaining stability. Structural reforms are also needed to boost medium-term growth and facilitate external rebalancing.
Directors highlighted that given the narrowing fiscal space, fiscal support should remain focused and limited, with a credible medium-term consolidation strategy. They welcomed the Thai government’s commitment to fiscal prudence, as outlined in the Medium-Term Fiscal Framework, and emphasised the need for effective implementation. They also agreed on the necessity of raising revenues to rebuild fiscal buffers and create space for growth-enhancing spending, as well as strengthening social protection systems.
The IMF directors expressed support for the accommodative monetary policy stance to stimulate domestic demand and mitigate inflationary risks. They suggested there may be room for further monetary easing, depending on economic data, and stressed the importance of continued monetary-fiscal policy coordination while preserving central bank independence. They also reiterated that the exchange rate should continue to act as a key shock absorber, with foreign exchange interventions only used to restore market order during non-fundamental shocks.
Financial Sector and Structural Reforms
While systemic risks in the financial sector remain contained, directors highlighted the need for ongoing vigilance, particularly with regards to tight financial conditions and elevated credit risks. They called for enhanced regulation and supervision, especially of savings cooperatives, as well as measures to facilitate orderly household debt restructuring and provide continued support to SMEs. Strengthening the Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) framework was also seen as essential.
The directors agreed that the current external environment underscores the need for decisive action on structural reforms. Key priorities include deepening trade and financial integration, improving labour productivity through structural transformation, reducing informality, advancing export sophistication, strengthening social safety nets, enhancing the business environment and governance, and advancing Thailand’s climate agenda.
Thailand: Selected Economic Indicators, 2020-26
- Per capita GDP (2024): US$7,347
- Exchange Rate (2024): 35.29 Baht/USD
- Unemployment rate (2024): 1%
- Poverty headcount ratio at national poverty line (2022): 5.4%
- Net FDI (2024): US$6.95 billion
- Population (2024): 71.67 million
The IMF’s assessment provides a comprehensive view of Thailand’s economic challenges and opportunities, emphasising the need for continued reforms and targeted policies to foster sustainable growth and ensure the country’s long-term prosperity.
