The economy will expand by 4% next year on the back of new stimulus measures and infrastructure projects, Deputy Prime Minister Somkid Jatusripitak said on Thursday.
The minister said the economy had moved out of its slump and into expansion mode, driven by new government initiatives to stimulate growth, including investment in infrastructure.
He projected gross domestic product to be between 2.9% and 3% this year and increase to 3.5-4% in 2016.
Mr Somkid said economic fundamentals remained strong, with high foreign reserves of US$157 billion, short-term foreign debt of only $55 billion and an unemployment rate of just 0.9%.
"Although this year's growth will be slow, the government's accelerated spending and stimulus will lift the confidence of consumers and industrial sectors," he told the Thai-Chinese Business Forum, jointly organised by the Board of Investment and Commerce Ministry.
He hoped for more investments from the Chinese government and investors, especially on rail lines, to tighten the two countries' economic ties.
Their trade is expected to reach US$60 billion this year and $70 billion next year.
Thailand and China will hold a ground-breaking ceremony for their joint rail project at Chiang Rak Noi station in Bang Pa-in district in Ayutthaya province on Saturday, although construction will not begin yet, as negotiations have not been concluded. Loan conditions remain a key sticking point.
Thailand is bargaining with China to keep the rate under 2%.
Deputy Prime Minister Prajin Juntong and Chinese State Councillor Wang Yong will chair the symbolic ceremony. The Chinese visitor is on a visit to Thailand for a meeting of the Joint Committee on Economic Cooperation at Government House with Mr Somkid.
Prime Minister Prayut Chan-o-cha told Mr Wang at Government House that he hoped the talks on the train projects will be wrapped up soon.
The Bank of Thailand on Wednesday pegged its 2016 economic growth forecast at close to 3.7%. It will give new projections on Dec 25.
Growth last year was just 0.9%, the weakest since flood-hit 2011.
Mr Somkid said the Federal Reserve's US interest rate increase was likely to have only a small impact on Thailand, and he was not concerned about capital outflows.
BoT governor Veerathai Santiprabhob told reporters on Thursday the Fed's move was expected and its tightening pace would be gradual, so there "should not impact or create volatility in financial and capital markets".
He said given policy divergence among big central banks, which would impact exchange rates, the business sector would have to give importance to managing exchange-rate risks and assets in the short-term.