The Finance Ministry's think tank yesterday trimmed this year's economic growth forecast to 1.4%, assuming that second-half growth comes in at 2.9%.
However, it predicted the economy would expand by 4.1% next year, underpinned by public spending on infrastructure and improvements in exports and tourism.
Kritsada: Exports hit by global slowdown
The lower forecast has taken the recent economic stimulus measures into account, said Kritsada Jinavijarana, director-general of the Fiscal Policy Office (FPO).
Despite the recent approval of 358-billion-baht stimulus measures to spur growth in the fourth quarter, effects have not gained full momentum, as some of the budget will be disbursed next year, he said.
Mr Kritsada blamed weak exports for the latest revision. The FPO forecasts shipments will grow a mere 0.1% this year, while imports will shrink 0.1%.
The FPO also cut the range of its GDP growth forecast to between 1.2% and 1.7% this year from 1.5% to 2.5%.
"The downwardly revised growth forecast is in response to the slower-than-expected rebounds in exports and tourism stemming from the fragile economic recovery in euro-zone countries and low agricultural product prices," Mr Kritsada said.
Economic growth in the first half contracted by 0.1% year-on-year as political turmoil damaged consumer and private sector confidence and the absence of a functioning government delayed public spending.
Moreover, the weak global economic recovery also hurt exports, which account for about 70% of GDP.
The FPO's latest forecast appeared to be more pessimistic than that of the Bank of Thailand, which recently maintained its GDP growth forecast at 1.5%.
The government and state enterprises managed to draw down 93.7% of budget expenditure and 65% of the investment budget in the previous fiscal year ended Sept 30.
The Finance Ministry targets 97% of expenditure and 73% of the investment budget for disbursement this fiscal year.
Fiscal-2015 budget expenditure has been set at 2.575 trillion baht, of which 450 billion or 17.5% is earmarked for investment.
The FPO also slashed this year's forecast for inflation to 2.1% from 2.4% and projected it would remain in check at 2.2% next year.