IMF warns Thailand to use targeted fiscal measures, projects Thai economy to grow only 2.1% in 2025
IMF urges Thailand to use targeted fiscal policy and accelerate reforms, as economic growth is projected to slow to 2.1% in 2025 and 1.6% in 2026
The International Monetary Fund (IMF) has released its 2025 assessment of the Thai economy, noting that in the first half of 2025 the Thai economy expanded by 3%, outperforming IMF’s earlier projections. However, the Fund expects overall growth for the full year to slow to 2.1% in 2025 and further down to 1.6% in 2026 amid rising economic risks.
On inflation, the IMF expects it to remain subdued and gradually move back toward the target range of 1–3% by 2027. Nonetheless, the Fund cautioned that the Thai economy continues to face uncertainty and downside risks in the period ahead.
Given the increasing economic challenges and limited policy space, the IMF recommends that Thailand adopt a carefully calibrated policy mix to maximise effectiveness. With public debt still elevated, fiscal policy should be targeted and exercised with caution, accompanied by a credible medium-term consolidation strategy.
The IMF views Thailand’s current accommodative monetary policy stance as appropriate and notes that further easing may be possible to mitigate downside risks to demand and inflation.
At the same time, with household debt still high, Thai authorities should expedite efforts to restore access to credit through financial measures that help reduce borrowing burdens, such as recent targeted debt-relief programmes, in order to strengthen monetary policy transmission.
Thai authorities responded that they have been pursuing measures to stimulate the economy and address structural issues on an ongoing basis, while maintaining fiscal discipline and ensuring policy sustainability.
They noted that several recent measures and new programmes have been introduced to support the economy across multiple dimensions. The IMF believes these efforts should be accelerated to help reduce the risk of Thailand slipping into even lower growth, and must be coupled with structural reforms to boost productivity and enhance competitiveness.
The authorities said they have acknowledged and responded to the IMF’s preliminary findings, agreeing on many points—particularly the need for cautious and disciplined policy implementation within existing constraints, the risks posed by external and domestic factors, and the importance of structural reforms to support sustainable growth.
