BANGKOK: Thailand’s economy is expected to grow between 3.5% to 4.5% next year thanks to increased exports and a recovery in the country’s vital tourism sector from the pandemic-driven slump, its finance minister said on Saturday.

The Southeast Asian country earlier this month reopened to vaccinated foreign visitors without quarantine requirements in a bid to reboot an industry which typically accounts for about 12% of gross domestic product (GDP).

This year’s growth is expected at 1.0% to 1.2% and monetary policy must support fiscal policy in helping the economic recovery which remains very fragile, Finance Minister Arkhom Termpittayapaisith told a business seminar. The economy contracted 6.1% last year.

“During the crisis, fiscal policy has to play a key role and monetary policy must help it to be able to spend... Today, both policies are still going together,” he said.

The government’s main spending is on medical and economic relief and stimulus measures, Arkhom said, adding the fiscal position was strong, with the public debt-to-GDP ratio expected at 62% at the end the fiscal year to September.

The central bank has left its key interest rate at a record low of 0.50% since May 2020 to help the economy.

Despite high oil prices, Thailand’s inflation was only about 1% in the first 10 months of the year, held down by state subsidies. In 2022, inflation is expected to be 0.7% to 1.2%, Commerce Minister Jurin Lasanawisit told the seminar.

He also said exports could rise by 15%-16% this year.

Arkhom said foreign tourists started to return after the reopening. The state planning agency predicted 200,000 foreign tourists this year, and forecast 5 million visitors next year. That compared with 40 million foreign tourists in 2019.