BANGKOK - THAILAND'S economy is likely to grow by between zero and two per cent next year and could contract in the last quarter of 2008 due to the global economic crisis, the finance minister said on Wednesday.

Korn Chatikavanij made the prediction two days after being sworn in by the king as part of new prime minister Abhisit Vejjajiva's cabinet, which faces a raft of political and economic challenges.

'Thailand's gross domestic product in 2009 is likely to expand at zero to two percent following the effect from the (global) economic crisis,' Mr Korn said, adding that the figure came from the finance ministry's Fiscal Policy Office.

The Thai economy was also seen as contracting in the last three months of this year, he added.

The previous government, earlier this month, forecast growth of 4.0 per cent for 2008 against 4.8 per cent for 2007.

Mr Korn said the government would need to introduce stimulating measures to speed up the country's economic recovery.

'Tax rebates for house buyers is a measure that can help economic recovery and can stimulate consumer spending for the domestic economy,' Mr Korn said. -- AFP