The Fiscal Policy Office (FPO) upgraded its economic growth forecast for this year to 4.2% from 3.8% and raised its estimate for exports.
Exports, making up 70% of Thailand's GDP, are predicted to grow 6.6% this year, up from the 5.7% growth projected three months ago, said ministry spokeswoman Kulaya Tantitemit.
Public investment is expected to drive economic growth this year, she said. The FPO predicts state investment will surge by 11.8% in 2018. The 11.8% forecast for public investment could be conservative based on assumptions that state agencies will disburse 66.3% of their investment budgets and state enterprises will take out 77.4% of theirs in 2018, said Ms Kulaya.
But the new 2018 forecast for public investment is marginally lower than the 11.9% growth predicted in October, albeit a significant increase from a 1.1% contraction recorded for 2017.
The FPO's latest forecast for GDP is rosier the Bank of Thailand's estimate at 3.9% in 2018.
A clearer schedule for the next election, despite a three-month delay from the previous plan, will help boost private sector confidence and accelerate investment, said Ms Kulaya.
The Finance Ministry raised its forecast on private investment to 3.8% this year, up from 3.4% predicted three months earlier and above 2.1% projected for 2017.
The brighter outlook for private investment could be attributed to the clearer investment plan for big-ticket infrastructure projects and a draft bill on the Eastern Economic Corridor, expected to be enforced soon.
The number of tourists is expected to increase by 8% to 38.2 million this year, and tourism income is estimated to grow at a faster pace of 12.6% to 2.08 trillion baht.
Thailand's economic growth last year is estimated at 4%, which would be the fastest pace since 2012, buoyed by robust tourism and exports. The Finance Ministry's think tank predicted 2017 economic growth of 3.8% three months ago.
The National Economic and Social Development Board is due to announce 2017 GDP data on Feb 19. The Thai economy rose 3.2% in 2016.
The FPO raised its export growth forecast to 9.7% last year from 8.5%.
