The International Monetary Fund has pointed out that in the face of an economic slowdown, Thailand needs a "carefully adjusted" set of policy measures to respond, and has called on the authorities to provide more targeted fiscal support while further easing monetary policy to sustain economic momentum.
According to Bloomberg, the International Monetary Fund stated in its latest Article IV consultation that although further adjustments to monetary policy should be data-dependent, real interest rates remain relatively high even after policy rate cuts, indicating there is still room for further easing. The organization emphasized that while fiscal and monetary policies can to some extent alleviate pressures, reversing sluggish economic growth still relies on deeper structural reforms.
The Bank of Thailand's Monetary Policy Committee unanimously decided last December to lower the overnight repo rate by 25 basis points to 1.25%, marking the fifth rate cut in 14 months. The committee will meet again on February 25 to further discuss the direction of monetary policy.
The Bank of Thailand subsequently issued a statement noting that the authorities basically agree with the IMF’s overall assessment and reiterated their commitment to continuing the prudent management of the macroeconomy to support economic recovery.
Amidst a combination of intensifying external headwinds and weak domestic demand, Thailand’s GDP growth in 2026 is expected to slow to 1.6% from last year's 2.1%. Inflation is expected to remain moderate, averaging about 0.4% in 2026, before gradually rebounding.