The Thai economy would rebound strongly this year, after heavy flood impeded its growth in 2011, the International Monetary Fund (IMF) said on Friday.
"The historic floods that inundated a large portion of the country have cost lives, destroyed physical capital and halted production in the last quarter of 2011. However, the economy is poised to make a strong rebound in 2012, despite uncertainty about the evolution of the global economy," the IMF said in a statement released after an IMF mission led by Thomas Rumbaugh concluded its consultation trip to Thailand.
The Washington-based lender expected Thai economy to expand by about 5.5 percent this year and 7.5 percent in 2013. It noted that with global economic growth projected at a subdued 3.3 percent in 2012, strong domestic demand will be necessary to sustain the recovery.
"The Bank of Thailand's accommodative stance is appropriately supporting the economy but monetary stimulus should be gradually withdrawn once the recovery is underway to keep inflation pressures from increasing," cautioned the Fund.
"The medium-term task is to ensure that Thailand enjoys rapid, sustained growth. This will require boosting investment and improving productivity. Tapping underdeveloped regions and spreading growth more geographically across the nation would help support annual growth of 5 percent over the medium term, with low inflation," the statement noted.