Thailand and the International Monetary Fund
IMF Involvement in the 1980's
During the span between 1973 and 1985, Thailand experienced a 36% fall in trade, stagnating GDP growth, sharp inflation, and increasing current account deficit coupled with increasing external debt. In order to counter this trend, Thailand entered into IMF backed adjustment program in which it devalued its currency while implementing stricter fiscal policies. The structural changes that this period of adjustment implemented resulted in 10 years of strong economic performance. Between 1987 and 1989, the GDP grew at over 10%, inflation dropped to just 5 percent, and current account deficit was less than 3% of the GDP. Despite this, some argue that the short-term focused structural changes in the 1980s were the catalysts for Thailand's economic crisis just 10 years later in 1997. Specifically, most of the growth in the ten years following the 1983 IMF adjustments were in the non-tradable sector rather than the export-oriented tradable sector. Furthermore, the IMF adjustments cut infrastructure investment from 8.9% of total GDP to just 5.2% in 1989.
Thailand and the International Monetary Fund-2