2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Thailand

Abstract

2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Thailand

The information below has become available following the issuance of the staff report (SM/17/100). It does not alter the thrust of the staff appraisal.

Inflation

Headline inflation decelerated to 0.4 percent year-on-year in April, somewhat weaker than projected by staff, given low fresh food prices and a further slide in core inflation (to 0.5 percent). Staff’s projection of 1 percent average headline inflation for 2017 requires timely execution of the fiscal stimulus and a pickup in private domestic demand. Staff continues to see substantial downside risks to inflation.

External Sector

  • The current account balance in the first quarter of 2017 reached US$13.3 billion (3.0 percent of GDP), in line with staff’s projection. The trade balance reached US$8.8 billion (2.0 percent of GDP), with rising goods imports (15.9 percent over the same quarter of 2016) exceeding the increase in exports (6.6 percent).

  • Gross international reserves as of end-March stood at US$207.5 billion (including a net forward position of US$26.6 billion), nearly US$10 billion higher than at end-2016. This reflects mainly a still favorable current account balance during the first quarter, together with significant capital inflows in January.

  • The baht appreciated in real effective terms by 2.6 percent in the first quarter of 2017 relative to 2016.