The Finance Ministry on Tuesday said it sees economic growth of 4% next year, and maintained its 2022 growth forecast at 3.5%, underpinned by increased domestic consumption, tourism and exports, despite higher inflation.
The economy is expected to expand more than 4% next year thanks to a recovery in tourism, Finance Minister Arkhom Termpittayapaisith told reporters.
The country's ratio of public debt to gross domestic product (GDP) is expected to be 61.3% at the end of September, down from a previous forecast of 62.76% as GDP increases.
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Mr Arkhom also said the cabinet meeting on Tuesday approved an adjusted public debt management plan for the current fiscal year ending September, with new borrowing rising by 14.2 billion baht (US$387 million) to 1.429 trillion baht ($38.96 billion).
Any hikes in the Bank of Thailand's (BoT) policy rate should not have a big impact on existing public debt as the government has largely restructured it to fixed interest rates, but new borrowing might be affected, he said.
An impact on consumption cannot yet be assessed as the transmission of the policy rate to financial institutions normally takes three to six months, he said.
Banks were asked to help ease the impact of higher rates on borrowers, he added.
While the economy will continue to be supported by improved activity following an easing of Covid-19 pandemic curbs, the impact of the war between Russia and Ukraine and global monetary policies will need to be closely monitored, Pornchai Theeravet, head of the ministry's Fiscal Policy Office, said earlier.
Second-quarter economic growth is expected to be higher than the first quarter's 2.2% annual pace, he said. Official second-quarter gross domestic product data will be released by the state planning agency on Aug 15.
"The second half should see continued recovery as tourism is good after the easing of curbs," Mr Pornchai told a news conference, adding other major countries also planned to allow their citizens travel.
The tourism-dependent country is expected to receive 8.0 million foreign tourist arrivals this year, up from the 6.1 million projected three months ago, he said.
There were nearly 40 million foreign tourists in pre-pandemic 2019.
The ministry now expects exports, a key driver of Thai growth, will rise 7.7% this year, up from the 6.0% increase previously forecast, Mr Pornchai said.
Despite higher inflation, private consumption is expected to rise 4.8% this year, rather than the 4.3% increase seen earlier, he said, adding inflation should gradually reduce if energy prices stabilise.
The ministry sees headline inflation of 6.5% this year, up from a previous forecast of 5.0%, well above the central bank's target range of 1% to 3%.
The BoT is expected to raise interest rates next month to contain inflation.