The Cabinet has approved a set of measures to cope with economic risk factors over the next eight months, following a report from the National Economic and Social Development Board (NESDB) saying the economy might grow less than the original forecast of 4.5-5 per cent this year.

Government Spokesman Surapong Suebwonglee said the NESDB had warned that although Thailand's growth target was met in the first quarter, that was partly due to the low year-on-year growth base, and GDP growth in the remaining months may be less than the target, because of skyrocketing oil prices.

The board proposed guidelines for economic management over the next eight months.

First, it suggested management of higher production costs and supervision of price adjustments for goods and services.

Second, it proposed the full use of production capacity.

And third, it proposed management of imports and exports to curb trade deficits and maintain current-account deficits at no more than 2 per cent of GDP.

The NESDB said exports of computers and computer parts, integrated circuits, rubber products, cars and auto parts, electrical appliances, rubber and tapioca continued to have bright prospects. Thai farm exports have also enjoyed positive trends in terms of both quality and quantity, due to the higher level of water in dams around the country.

The board said the tourism industry should continue to do well after recovering from the tsunami, with 13 million to 13.5 million visitors expected to visit Thailand this year. Meanwhile, public savings should increase, due to rising interest rates.

However, the NESDB said rising oil prices would become an economic constraint over the next eight months. The average oil price should be around US$66 (Bt2,500) a barrel, up $17 over last year's average.

Inflation is expected to be 5 per cent, against a backdrop of upward interest rates, a slowdown in household spending and a deceleration in both private investment and the real-estate sector.

The NESDB suggested the government expedite short-term measures like energy-saving, income promotion and spending cuts by the public and businesses.

Surapong said measures approved by the Cabinet included energy conservation. The government will set up 180 natural gas for vehicles (NGV) stations around the country and another 10 for fishing trawlers. It will boost the use of NGV stations to promote the use of natural gas by mass-transit buses.

The government also approved income-promotion measures by promoting exports and income from tourism, accelerating the opening of Suvarnabhumi Airport, increasing farm incomes and promoting grass-roots projects to combat poverty.

Measures to reduce the burden on the public and businesses include adjustment of consumer prices, management of imports, constantly checking inventories and ensuring that budget money is drawn down on schedule.