IMF Says Thai Fiscal Support, Rate Cut Needed For Tepid Economy

The International Monetary Fund (IMF) has urged Thailand to implement additional fiscal support measures and consider cutting interest rates to stimulate its sluggish economy. The IMF highlighted that despite some recovery signs, economic growth remains weak and vulnerable to external shocks, necessitating proactive policy interventions to bolster domestic demand and investment. Thailand’s economy has faced challenges including subdued consumer spending, global supply chain disruptions, and inflationary pressures. The IMF’s recommendations come as the country grapples with these headwinds while trying to sustain a post-pandemic recovery. The fund emphasized that targeted fiscal stimulus, such as increased government spending on infrastructure and social programs, combined with monetary easing, could help revive growth momentum and support employment. The advice reflects broader concerns about the uneven global economic recovery and the risks posed by geopolitical tensions and fluctuating commodity prices. For Thailand, a major exporter and tourism-dependent economy, maintaining economic stability is crucial to safeguarding livelihoods and preventing a deeper downturn. The IMF’s call for coordinated fiscal and monetary policies underscores the need for a balanced approach to managing inflation risks while fostering growth. Implementing these measures could also enhance investor confidence and improve Thailand’s economic resilience. However, policymakers must carefully calibrate interventions to avoid exacerbating fiscal deficits or triggering inflation spikes. The IMF’s guidance serves as a critical input for Thailand’s economic strategy amid ongoing uncertainties in the global and regional economic landscape.