The goverment is aiming to achieve economic growth of 4% this year, with a recovery expected in the fourth quarter of the year, amid expectations that easing coronavirus restrictions will bring in tourism income, Finance Minister Arkhom Termpittayapaisith said on Wednesday.
The tourism-reliant economy contracted 6.1% last year, its deepest decline in over two decades, with tourism devastated by the impact of the pandemic.
The economy is improving but when it fully recovers will largely depend on external factors, Mr Arkhom told a business seminar.
"Exports have not grown that much and tourism is missing," he said.
Foreign tourists are expected to return late this year as Thailand prepares to relax entry restrictions, Arkhom said.
"We believe from the fourth quarter tourism revenue will come in," he said.
Thailand plans from next month to cut its mandatory quarantine from 14 to seven days for foreign arrivals vaccinated against the coronavirus. The quarantine could be waived in October, officials say.
Last year, foreign visitor numbers plunged 83% from nearly 40 million in 2019. The state planning agency predicts 3.2 million arrivals this year.
The government is hoping for economic growth of 4% this year, also helped by domestic demand, a recovery in exports and increased public investment, Mr Arkhom said.
"The 4% growth target this year is quite ambitious, but the government still hopes to achieve that," Mr Arkhom said.
The Finance Ministry has officially forecast 2.8% growth this year, while the International Monetary Fund projects 2.6%.
The government is considering extending a co-payment subsidy scheme to boost consumption, he said.
Southeast Asia's second-largest economy will take about two years to return to pre-pandemic levels, so monetary policy will need to work alongside fiscal policy until the recovery is secure, Mr Arkhom said.
Thailand has no plans to cut its 20% corporate tax ceiling as tax revenue is the main source of income and the level is low compared with neighbouring countries, apart from Singapore, Mr Arkhom said.