The Finance Ministry trimmed its economic growth forecast for this year to 3.7% from 3.8% and sharply cut its export estimate as global demand slows, a senior ministry official said on Thursday.
But growth this year would be supported by government investment and economic stimulus, Krisada Chinavicharana, director-general of the Fiscal Policy Office, told reporters.
The ministry predicted exports, a key driver of the economy, will grow just 0.1% this year, with a forecast range of a 0.4% fall and a 0.6% rise. Three months ago, it projected a 3.2% increase.
"Export prices are likely to contract although quantity will be higher," Mr Krisada said.
"But the economy will benefit from government measures, some of which have been delayed from last year ... Several major infrastructure projects will also be signed this year," he added.
The ministry's new growth forecast for 2016 was still higher than the central bank's call for a 3.5% expansion, which was cut from 3.7% last month. The central bank has also forecast no export growth this year.
Exports, which account for about two-thirds of Southeast Asia's second-largest economy, tumbled 5.8% in 2015, the biggest annual decline in six years.
The ministry maintained its GDP growth forecast for 2015 at 2.8%. Official 2015 GDP data is due on Feb 15.
Weighed down by weak demand at home and abroad, the economy has yet to get back on firm footing since the army seized power to end political unrest in May 2014. Growth in 2014 was just 0.9%, the weakest in three years.
In a bid to revive the economy, the junta has introduced various economic measures, and this week approved an additional 35-billion-baht stimulus for rural areas, which has been hit hard by drought and low crop prices.
Mr Krisada said the ministry expected no change in the key interest rate this year despite hikes by the US Federal Reserve.
Last week, central bank Governor Veerathai Santiprabhob told Reuters that Thailand had no need to cut the policy rate as fiscal stimulus was driving growth.
The central bank has left the rate steady at 1.50% since April after two surprise cuts that took it close to the record low of 1.25% reached during the global financial crisis. Its next review is due on Feb 3.