Thailand's fourth-quarter economic growth is forecast within a range of 2.5% to 3%, adding to signs that full-year growth will come in at less than 1%.
The country is nonetheless on course for recovery, Deputy Prime Minister MR Pridiyathorn Devakula said Monday.
MR Pridiyathorn: On course for recovery
The economy contracted by 0.5% year-on-year in the three months through March before bounding back to rise by 0.4% in the second quarter and 0.6% in the July-September quarter.
The slow pickup of the economy — wracked by pre-coup political turmoil, tepid exports, weak domestic consumption, high household debt and delayed public spending — has compelled policymakers and think tanks to cut their GDP forecasts repeatedly.
The National Economic and Social Development Board last month slashed its growth forecast for 2014 to 1% from a range of 1.5% to 2% previously.
- Six-part plan: Cabinet sees new stimulus package
- Rubber support falters: Government blames 'red tape'
The central bank earlier trimmed its full-year economic growth projection to 1.5%, and a further cut is likely on the cards.
MR Pridiyathorn said the effect of the 364.5-billion-baht pump-priming measures recently approved by the cabinet was expected in January or February, delayed from the fourth quarter due to the bogged-down budget approval process.
The first stimulus, aimed at jump-starting the country's economy in the final quarter, included a cash handout of up to 15,000 baht each to more than 3 million rice farmers and sped-up payments of 129 billion baht from the fiscal-2015 investment budget across ministries.
The cash giveaway of 25.4 billion baht has already been paid to rice farmers, and all farm households are expected to receive the cash handout this month.
Separately, some 14 billion baht of the government's budget for investment was drawn down during the first two months of this fiscal year.
The government set an investment budget of 147 billion baht for fiscal 2015, which began on Oct 1.
Moreover, government expenditure worth 570 billion baht was disbursed during the October-November period.
MR Pridiyathorn said economic growth could rev up in next year's first quarter if the government's disbursement proceeded on schedule, obviating the need for a second round of stimulus.
Phatra Securities managing director Supavud Saicheua forecasts GDP growth of 0.8% this year before a recovery to 3.7% next year.
This year's economic growth projection is based on the assumption of flat growth or a marginal contraction in exports.
Delays in budget disbursement and investment in infrastructure projects also share blame for the weak GDP growth forecast of less than 2% for the second half of this year.
An economic rebound in advanced economies, particularly the US, could help to drive Thailand's export growth to 3.5% next year and underpin the country's recovery.
In the meantime, Ekniti Nitithanprapas, deputy director-general of the Fiscal Policy Office, said domestic consumption remained crucial for the country's economic pickup in addition to speeding up budget disbursement.
The government should thus focus on boosting people's incomes and lowering household debt to empower consumer spending, he said.
Separately, Mr Ekniti raised concerns about Russian-European tensions.
He fears they could trigger a panic in financial markets around the world and add pressure to foreign capital flows stemming from monetary policies adopted by several central banks.