The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) has reduced its GDP growth forecast to 0.5-2% due to the severe impact of the third Covid-19 outbreak despite bright export prospects this year.
Even the state's plan to reopen Thailand by allowing vaccinated foreign tourists to visit Phuket without quarantine later this year may not be enough to restore the domestic economy, JSCCIB chairman Supant Mongkolsuthree said on Wednesday.
JSCCIB decided to revise its GDP growth forecast from 1.5-3% as daily infection rates have remained high for over a month.
Exports appear to have a positive outlook as the group believes they will grow 5-7%, up from its 4-6% estimate.
However, JSCCIB has maintained its 1-2% inflation rate prediction.
"The government is trying to use Phuket to boost the economy but we're afraid it may not be enough to help achieve the goal," said Mr Supant, who is also chairman of the Federation of Thai Industries.
As the third wave of Covid-19 remains volatile, economic recovery may take a long time as people's purchasing power and employment have been affected, he said.
It is the worst Covid-19 outbreak in Thailand and it has dealt a heavy blow to economic sentiment and eroded people's confidence in the state's efforts to curb the spread.
JSCCIB has urged the government to speed up spending under its plan to borrow an additional 700 billion baht to revitalise the economy.
Payong Srivanich, chairman of the Thai Bankers' Association, agrees with the new loan decree despite worries over high public debt.
A change in the Covid-19 situation requires new debt management to help Thailand get through the crisis, he said, adding that other countries are also using a similar approach to deal with the impact of the pandemic.
Last year, the government approved a 1-trillion-baht loan decree, which now only has 166 billion baht left, according to a source.
JSCCIB also wants the government to adjust its economic stimulus packages, including the co-payment subsidy scheme.
Under the scheme, the government pays 50% of purchases of goods up to 150 baht per person per day, capped at 3,500 baht per person. However, it should consider increasing the ceiling to 6,000 baht, Mr Supant said.
"The scheme can generate 180 billion baht in the economic system," he said.