Despite the nascent economic recovery in the US and Europe, the Thai economy still faces lingering global financial market volatility in the second half, says Bank of Thailand governor Prasarn Trairatvorakul.
He said since recovery measures initiated by the US and European governments have not produced fruitful enough results, financial market sentiment is sensitive to news and information, sometimes leading to market turbulence.
"The current financial market sentiment can be compared to easy susceptibility to carsickness, as it is quick to respond to volatile information, causing panic and instability in the market as a result," said Mr Prasarn.
Global financial markets have been volatile recently, ever since the US Federal Reserve hinted it would start tapering its monthly asset purchases if economic conditions improved.
The potential termination of the US central bank's monetary easing stance has dented demand for emerging-market assets and triggered a repatriation of funds to the US.
In Thailand, the baht has weakened to about 31 to the US dollar after reaching a high of 28.55 in mid-April.
Mr Prasarn said the Bank of Thailand has a set of policies to mitigate global financial woes including a relaxed approach aimed at managing foreign exchange rates.
Regarding the central bank's revised forecast of 4.2% for Thai economic growth this year, he said the figure is in line with forecasts for the global economy and trade.
Weaker-than-expected 5.3% growth in the first quarter, ebbing domestic consumption and China's economic slowdown have compelled state agencies to trim 2013 growth projections.
Economic recovery in the US and Japan is a potential tailwind that could bolster growth of the Thai economy, as Thailand is a major part of the supply chain for products exported to those countries, said Mr Prasarn.
He said Thailand should address its structural development problems in terms of skilled labour, value-added items, education and research.
Bank of Thailand data show the country risks succumbing to the "middle-income trap".
Gross domestic product growth has been tepid since 2000, while income per person lags behind that of neighbouring Malaysia as well as Taiwan and South Korea.