The government is targeting annual GDP growth of at least 5% as it plans to roll out measures to ease people's plight, including a moratorium on farmers' debt and lower fuel and electricity prices, according to Prime Minister Srettha Thavisin.
He was speaking during an inspection trip to the Ubolratana Dam in Khon Kaen on Friday, where he was briefed on the drought situation and water management in the northeastern province.
On Tuesday, the Bank of Thailand (BoT) reduced its growth projection for 2023 after the latest GDP results and inflation rate were lower than forecast.
GDP growth stood at 1.8% in the second quarter, below the central bank's projection.
This was mainly attributed to external factors as the BoT plans to review its economic assessment this month, according to its governor Sethaput Suthiwartnarueput.
The regulator projects growth of 3.6% for this year, with inflation expected to fall within a target range of 1-3%.
Mr Srettha also met local villagers who voiced concern about the impact of drought caused by the El Nino weather phenomenon.
Rice farmers also complained about a shortage of rice strains due to the lack of development of new ones, as well as falling crop prices and mounting debts.
Mr Srettha assured them the government was working on water-related problems such as drought and flooding, as well as investing in the agricultural sector and developing more irrigated areas.
He said the Interior Ministry will work with the military and other agencies to develop reservoirs and dredge canals to improve water flow as part of the short-term measures to combat drought.
The prime minister stressed the need to ensure sufficient water supplies for the agricultural sector amid the looming drought.
Mr Srettha said the government will also mull reviving the Kong-Chi-Moon water diversion project to channel water away from the Mekong River in order to nourish farmland in the Northeast.
The project will be a long-term solution to water-related problems, he said.
Under the project, 14 check dams would be built in the Chi and Moon river basins to store and supply water to hundreds of thousands of rai of farmland.
However, the project was suspended several years ago as it caused widespread soil salination in the region.
Mr Srettha went on to say the falling crop prices and farmers' low incomes are a major concern.
The government has a policy to boost their income and reduce their expenses by reducing fertiliser and insecticide costs, increasing crop yields per rai (unit of harvested area) as well as opening new trade markets, he said.
"This will also lead to an increase in farmers' net income," the prime minister said.
Mr Srettha added that Deputy Prime Minister Parnpree Bahiddha-Nukara, who also serves as foreign minister, is an expert in global trade.
He said Mr Parnpree would seek new markets overseas and find ways to amend trade agreements with other countries in a way that will benefit Thailand more.
The prime minister also said that the planned moratorium on farmers' debt will be considered at the next cabinet meeting.
"This measure will alleviate the plight of farmers and boost their morale," he said.
The debt moratorium must be carried out alongside other measures, such as reducing farmers' expenses and increasing their income, he noted.
''This will be a long-term solution,'' the prime minister promised.
He said the next cabinet meeting would also discuss measures to reduce diesel and electricity prices and look at the possibility of carrying out a potash mining project to boost fertiliser supplies and reduce prices.
Potash is a mineral mainly used as an ingredient in the production of potassium fertilisers.
Mr Srettha insisted that rice-pledging or rice price guarantee schemes would not be part of the government's measures to deal with the problem of falling rice prices.
"The government will not pursue any rice-pledging or rice price guarantee schemes except if a disaster occurs as a result of global price distortions," he said.
"We will focus on boosting farmers' net income," the prime minister added confidently.