The economy remains on a recovery path, albeit slower than expected, as growth is expected to pick up at a sanguine pace in the final quarter, says the Bank of Thailand governor.
Although it is likely to be a modest V-shaped recovery if this year's economic growth comes in below 1.5% as projected by the central bank, the recovery outlook in the second half is still expected to be at an optimistic level, said Prasarn Trairatvorakul.
"We think economic figures in the third quarter will be positive, which would be higher than those in the second quarter, and we expect the fourth quarter to be even better than the third quarter, so the outlook remains on a recovery path," he said.
"This is one of the important reasons contributing to the Monetary Policy Committee (MPC) decision to keep its 2% interest rate policy unchanged."
The economy will continue its recovery next year supported by improved private investment, better domestic consumption, acceleration of budget disbursement, the Board of Investment's eco-car project and renewable energy, said Mr Prasarn.
The National Economic and Social Development Board will announce the third quarter's economic growth data next Monday.
The MPC will revise down its GDP forecasts for this year and next of 1.5% and 4.8%, respectively, due to lacklustre growth momentum and emerging signs of lower-than-expected growth in 2015.
"It must be accepted that this year's exports will not achieve double-digit growth as in the past and the figure could be negative, as Thailand's technological export products, namely hard-disk drives, have faced shrinking global demand," Mr Prasarn said.
Slower-than-expected budget disbursement, falling prices of agricultural produce and the tepid global economic recovery are factors contributing to Thailand's sluggish economic recovery, he said.
The rate-setting council last Wednesday voted 6:1 to maintain its 2% benchmark interest rate for a fifth straight meeting, with one member voting to reduce the rate by 25 basis points to accommodate economic recovery momentum.
Separately, Mr Prasarn said the implementation of inheritance tax was not expected to cause excessive capital outflows in the first phase.