The Fiscal Policy Office (FPO) has maintained its average forecast for Thai economic growth this year at 4%, mainly as a result of recovering domestic consumption and the tourism sector, says the office's director-general Pornchai Thiraveja.
The FPO predicted economic growth this year within a range of 3.5-4.5%, he said on Friday.
The office upgraded its forecast for 2021 economic growth to an average of 1.2% from 1% as a result of strong exports, state stimulus packages and a successful vaccination programme.
Mr Pornchai said the soaring prices of some products should be temporary and would not dent domestic purchasing power.
High global crude oil prices are likely to fall in the second quarter, in line with an expected increase in oil supply.
He said high household debt, which accounted for 89.3% of GDP in the third quarter last year, is unlikely to dampen domestic consumption this year as debt incurred from spending on goods and consumption was low.
Of the total debt, 20% was incurred from investment in doing business, while only 27% was from spending on goods and consumption. The remainder was attributed to property investment and car hire-purchase payments.
The FPO predicts the Omicron variant will take a toll on the Thai economy in this year's first and second quarters.
The number of infections will peak in March before declining in the second half of the year, said the office.
The government has 100 billion baht remaining from the 500 billion baht of borrowing under the second emergency loan decree.
Mr Pornchai said this sum would be sufficient to handle the pandemic impact on the economy as the infection rate is improving.
According to the FPO, private consumption this year is expected to expand by 4.5%, while export sector growth is forecast at 3.6%.
The number of foreign tourist arrivals is forecast at 7 million this year.
Public consumption and public investment this year are expected to expand by 1.2% and 3.7% per year, respectively. Private investment is forecast to grow by 5% per year.
The FPO predicts a headline inflation rate of 1.9% this year.
Among the risk factors facing the Thai economy that should be closely monitored are uncertainties related to the pandemic, the volatility of the global economic and financial situation, and high energy and crude oil prices in the world market, said the office.