Thailand's economy is projected to grow 7.4 percent in the first quarter of this year, Finance Minister Somkid Jatusripitak said on Friday, an estimate down from a projection of 7.7-8.1 percent by his ministry in February.
Somkid told reporters he expected the gross domestic product to grow 7.0-8.0 percent in 2004, a range wider than the ministry's February forecast of 7.7-8.1 percent growth.
"The momentum of domestic purchasing power is still strong and the flow of new investment continues," Somkid said. "Bird flu is no longer a problem and short-term shocks have already been absorbed by the markets."
The bird flu outbreak has killed at least 22 people in Vietnam and Thailand and ravaged the Thai poultry industry, which generated exports last year worth $1.4 billion.
Thailand's economic planning agency said that early this month the bird flu epidemic would erode economic growth by 0.4 of a percentage point this year.
Somkid said Thailand's stock market had room to grow and urged investors not to be panicked by short-term volatility.
"The index in the 600 range doesn't reflect the real health of the Thai economy, therefore don't let short-term shocks undermine your confidence in the Thai economy," he said.
The volatility of global oil prices was the crucial factor for economic growth in the second half, so the government would maintain its price-stability scheme for retail gasoline and diesel imposed in January, Somkid said.
"The government will maintain the oil price-stability scheme and to avoid its impact which could interrupt our macroeconomic growth," Somkid said of oil price volatility. The government had already spent four billion baht ($100 million) since mid-January to keep the price of 95-octane gasoline at 16.99 baht per litre and diesel at 14.59 baht, the Thai-language business daily Kao Hoon reported on Friday.
It said the government planned to borrow another 16 billion baht from two state banks to finance the scheme for the rest of this year.