IMF Projects Thai Economy To Grow 3 Pct This Year

BANGKOK, March 29 (Bernama) -- Thai economy is expected to recover moderately with Gross Domestic Product growing at three per cent this year and 3.2 per cent next year, the International Monetary Fund (IMF) said. The IMF said it supported the planned expansionary fiscal stance in the context of sustainable medium-term fiscal framework. "The government's ambitious investment plans are essential to upgrade infrastructure, support the recovery, crowd in private investment, and boost potential investment," it said in a report Tuesday. The IMF also recommends Thailand to gradually increase its Value-Added Tax (VAT) to 10 per cent once the recovery is on sound footing besides developing social safety nets that are better aligned with structural challenges. There is also room for further monetary easing, it said while recognising that Thai monetary policy framework had achieved a high standard of transparency. On public investment, the IMF said it would remain a key driver, rising over the next few years and crowding in private investment, while headline inflation is projected to turn positive in 2016. It said Thailand's current account surplus is projected to decline over the medium-term as the positive shocks of terms-of-trade partially reverse and domestic demand improves. However, important risk cloud the outlook, it added. "On the external front, rebalancing in China may result in a faster slowdown and larger negative spillover. A bout of global financial volatility could accelerate capital outflows and further tighten financial conditions," it added. -- BERNAMA