(Bloomberg) -- Thailand’s economy is set to expand this year at a slower pace than previously forecast as it reels from the impact of its deadliest Covid-19 outbreak, the Finance Ministry said. 

The ministry lowered its gross domestic product forecast to 1% on Thursday, from 1.3% predicted in July. It’s the ministry’s fourth revision this year after a resurgence in cases from April triggered growth-crippling restrictions on businesses and travel.

Southeast Asia’s second-largest economy is likely to expand at 4% next year, supported by exports and tourism, according to Pornchai Thiraveja, director general of the fiscal policy office at the ministry. The ministry had earlier forecast growth as fast as 5%.

Output will accelerate next year on support from tourism and local demand after restrictions ease, Pornchai said in a briefing, adding that fiscal support will continue to play a key role. The ministry has also been in close talks with the Bank of Thailand and is ready to issue further measures if necessary, he said.

For more details from the briefing, click here. 

The Finance Ministry is the latest of the three key agencies to adjust growth forecasts as policymakers respond to the pandemic with a combination of containment measures and fiscal support. Economic growth is seen rebounding to 3% in the final quarter from a 3.5% contraction seen in the preceding three months when much of the nation was under a quasi lockdown to fight the pandemic.

Prime Minister Prayuth Chan-Ocha has eased some Covid curbs in recent weeks and unveiled a plan to welcome back vaccinated foreign tourists from Nov. 1 to ward off a back-to-back annual economic contraction.     

The Bank of Thailand last month cut its GDP growth forecast to 0.7%, while the National Economic & Social Development Council followed with a downward revision to a range of 0.7% to 1.2%. Both agencies cut their predictions when new infections jumped to more than 20,000 daily. The caseload has dropped to 8,000-9,000 per day in recent weeks. 

The cabinet last week approved a slew of stimulus measures worth 92 billion baht ($2.8 billion) to reduce the cost of living, boost domestic consumption and support the economy. That’s on top of billions of dollars in fiscal support unveiled since the start of the pandemic to minimize the hit to the tourism- and trade-reliant economy.

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