Thailand's GDP growth could still reach 4-5% this year because recovery momentum will be supported by vaccines and fiscal stimulus, compensating for tourism losses, says Finance Minister Arkhom Termpittayapaisith.
Though a second wave of Covid-19 has clouded the country's economic growth outlook, hopes of a rebound rest upon vaccines preventing the spread of the virus, said Mr Arkhom.
"We still hope the economy will expand by 4-5% this year, while last year's GDP contraction of 6% is better than initially expected," he said.
According to "Restoring Incomes; Recovering Jobs", the latest edition of the World Bank's economic monitor of Thailand released on Wednesday, the economy is estimated to dip by 6.5% in 2020, with a projection of 4% growth in 2021.
A sustained recovery in employment will be essential to help the country bounce back in 2021-22, said the report.
Thailand's GDP growth rate is estimated at 4% this year in a base-case scenario, where the government contains new outbreaks and does not implement a nationwide lockdown, according to the World Bank.
If the outbreak cannot be contained and the government imposes a lockdown across the country, the growth rate would be 2.4% in 2021.
Thailand's GDP contracted by 6.4% year-on-year in the third quarter of 2020 following a 1.8% decline and a 12.2% contraction in the first and second quarters, respectively.
The 12.2% year-on-year decline in the second quarter was the biggest dip in the country's GDP since the aftermath in 1998 of the Asian financial crisis.
The government has adopted policies aimed at sustaining employment and private consumption to compensate for losses in the tourism industry, said Mr Arkhom.
Approved in April 2020, the 1-trillion-baht loan decree was aimed at shoring up the economy and providing financial relief for businesses and the general public as the crisis continued.
The cabinet on Tuesday confirmed 210 billion baht of financial remedy to alleviate hardship caused by the fresh Covid-19 outbreak.
Under a new financial aid scheme known as "Rao Chana", the government plans to provide a total of 7,000 baht per person over two months through credit transfers, covering 31 million people affected by the pandemic.
Mr Arkhom said the government needs to make preparations to manage the economy in the future by changing three main industries: digital, green energy and healthcare.
The government is in the process of revamping the tax structure to generate sustainable revenue and strengthen public finance, he said.