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Thailand under pressure: IMF warns of economic traps!
The IMF recommends that Thailand adopt a cautious fiscal policy to deal with high public debt and structural challenges.
Thailand under pressure: IMF warns of economic traps!
Numerous economic challenges are currently causing tough times in Thailand. The International Monetary Fund (IMF) recently made recommendations to help boost the Thai economy. The delegation led by Peter Breuer visited Thailand from October 30 to November 13, 2025 and noted the need for careful blending policies to maximize economic efficiency and control high public debt. Loud Thai Publica The need for structural reforms to improve economic resilience and growth capacity is a central issue.
The IMO's recommendations include pursuing a medium-term plan to achieve credible fiscal balance, as well as a review of current monetary policy, which may need to be further eased to address demand and inflation risks. This is no coincidence, as the forecast suggests that economic growth could be as low as 2.1% in 2025 and fall even further to 1.6% the following year.
Growth and uncertainties
A closer look at the economic situation is essential. How EconoTimes reports, Thailand's economic growth slowed significantly through the third quarter of 2023, partly due to weakening consumer spending and internal uncertainties. Forecasts show GDP rising 1.6% year-on-year, down from 2.8% in the previous quarter. In particular, high household debt and weak consumer confidence are putting a heavy strain on private spending.
However, the recovery is not entirely lost: the export sector remains strong and shows impressive resilience. In September, exports rose 19%, the fastest increase in more than three years. This could be a bright spot for the economy, while the Bank of Thailand revised up its export growth forecast to 10% in 2025.
The “traps” of the Thai economy
But despite this positive news, the situation is not without problems. Thailand faces four key economic “traps” that need to be overcome, as follows Nation of Thailand. First, the increase in US tariffs directly affects growth forecasts, which is why they were lowered to 1.8%. Secondly, the high dependence on tourism makes the economy more vulnerable to global shocks - the recovery from COVID-19 is slower than in other countries. Third, high household debt limits domestic consumption and needs to be urgently addressed. Finally, structural problems such as underinvestment in human and physical capital and an aging population lead to reduced labor force participation and productivity.
The IMF's recommendations call for, among other things, a de-escalation of trade conflicts and a diversification of trading partners in order to reduce economic uncertainties. Monetary policy adjustments and targeted fiscal support are also proposed to take proactive measures against the ongoing economic challenges.
It will therefore be exciting to see how Thailand overcomes these challenges. The mix of structural reforms, flexible monetary policy and measures to support domestic consumption could provide the direction needed to restart economic growth and further reduce uncertainties.