BANGKOK (Bloomberg): Thailand needs a "carefully calibrated” mix of policies to support a slowing economy, the International Monetary Fund said, urging targeted fiscal support with additional monetary easing.
While monetary policy shifts should remain data dependent, there is a scope for further monetary easing as the real interest rate remains elevated despite the policy rate cuts, the IMF said in its latest Article IV consultation. Fiscal and monetary policies may help to a certain degree, but structural reforms are needed to reverse tepid growth, it said.
The Bank of Thailand’s Monetary Policy Committee voted unanimously to cut the one-day repurchase rate by 25 basis points to 1.25% in December, the fifth cut in 14 months. The MPC is due to meet on Feb. 25 to deliberate a monetary policy decision.
Thai authorities broadly share the IMF’s assessments and reaffirmed their commitment to prudent macroeconomic management to support economic recovery, the Bank of Thailand said in a statement.
Thailand’s GDP growth is projected to decelerate to 1.6% in 2026 from an estimated 2.1% last year as mounting external headwinds and constrained domestic demand weigh on economic activities.
Inflation is expected to remain subdued, averaging 0.4% in 2026 before gradually firming. -- ©2026 Bloomberg L.P.
