The Asian country has already experienced an improvement in its economic fortunes, but authorities must take steps to boost growth and inclusiveness in the long run, the IMF says.

The Washington-based fund’s executive board said in a statement: “The recovery has yet to become broad-based, as structural challenges continue to be a drag on domestic demand, while inflation dynamics remain weak.”

It added that it was crucial for Thailand to undertake fiscal reforms aimed at strengthening public investment capacity and social expenditure.

The IMF said this includes ensuring Thailand’s government has enough revenue coming in to deal with the country’s ageing population and the costs associated with this.  

It said Thailand should aim to increase productivity and address the impact of its ageing population through pension reform, developing its human capital, and getting more women into the labour market.

The country’s government has taken important measures to strengthen financial stability, the IMF said.

Growth in the gross domestic product is estimated at 3.9% in 2017 and 2018, driven by tourism and manufacturing exports, and the IMF expects this to continue in 2019.

But the fund pointed to looming external risks that could dent growth, such as the rise in  trade protectionism.

However, the IMF also expects a rebound in public investment in line with the Thai government’s infrastructure plans, which will include private investment.