The Finance Ministry on Thursday reduced its 2021 economic growth forecast for a second time this year to 2.3% from 2.8% growth, after a third wave of coronavirus infections struck the tourism-reliant nation this month.
The latest outbreak has seen half of its overall cases reported this month alone and came as the country was preparing to reopen more broadly to foreign tourists, as vaccinations increase globally.
The ministry slashed its forecast for the number of foreign tourists to only 2 million this year from 5 million it had predicted three months ago, senior ministry official Kulaya Tantitemit told a briefing.
That compares to nearly 40 million in 2019, before the pandemic hit.
The expected fewer tourists "will have quite an impact" as that will cut tourism money to just over 100 billion baht from 260 billion baht previously projected, she said.
Tourism generally accounts for 12% of gross domestic product and foreign visitors tumbled to 6.7 million last year. The nearly 40 million tourists of 2019 spent 1.91 trillion baht.
Ms Kulaya said inoculations at home and abroad could provide some support.
"The distribution of vaccines is very important as it will be positive for economic activity," she said.
"We expect the economy to expand more late in the third quarter or early in the fourth quarter," Ms Kulaya added.
The ministry raised its 2021 forecast for exports, however, a key growth driver, to an 11% rise from the 6.2% increase seen in January as the global economy improved, she said.
The ministry had taken into account more than 100 billion baht in additional stimulus in its new GDP forecast, she said, adding the new measures should be finalised next month.
The government has said it has about 380 billion baht available for relief measures.