Thailand - Thailand's economy is expected to contract by 3 per cent this year and could contract by up to 9 per cent if the government fails to push through stimulus programmes, Finance Minister Korn Chatikavanij said Monday.

"If the government had no stimulus programmes the gross domestic product (GDP) could contract 8 to 9 per cent this year," Korn told reporters.

The Fiscal Policy Office has lowered its GDP growth projection for 2009 from minus 2 per cent to minus 3 per cent, he said.

With Thailand's exports falling and foreign investments down, negative GDP growth appears inevitable this year.

In January the country's exports dropped 26.5 per cent year-on-year, and in February fell 11.3 per cent year-on-year.

In an effort to boost economic growth, the Thai government has introduced various stimulus measures, including a
116.7-billion-baht (3.4-billion-dollar) emergency package launched in January that includes cash handouts and subsidies for utilities.

Prime Minister Abhisit Vejjajiva earlier this month announced a 1.4-trillion-baht (39-billion-dollar) stimulus package to be phased in over the fiscal years 2010-12 for investment in road construction, high-speed railways, irrigation systems and health clinics nationwide.

The government will this week discuss terms of borrowing for 70 billion baht in loans it intends to seek from international institutions to help finance its stimulus measures. (dpa)