BANGKOK - NEW premier Abhisit Vejjajiva said on Friday that tackling Thailand's current economic problems will be a 'tougher job' than dealing with the 1997 Asian financial crisis.

The Oxford-educated economist said he planned a 300 billion baht ($12.4 billion) stimulus plan to help the kingdom to recover from months of political turmoil and ride out the global economic downturn.

'Many people would argue that it's a tougher job to deal with the crisis this time around because you have both the economic and the political dimensions,' Mr Abhisit told AFP in an interview when asked to compare with 1997.

'Last time the crisis began here and spread out. This time we are feeling the effects from the crisis that had happened outside.

'And while we have good financial health, it's the real sector that will come back to hurt the financial sector,' he said.

The British-born premier, who came to power on Dec 15 after months of protests helped drive out the previous government, has named university contemporary and former banker Korn Chatikavanij as finance minister.

Mr Korn said on Wednesday that growth in 2009 is set to expand at zero to two per cent and the economy had likely contracted in the last three months of this year. Growth for 2008 has been forecast at four percent, against 4.8 per cent for 2007.

The problems in recent months have been exacerbated by months of protests against the previous administration loyal to ousted premier Thaksin Shinawatra, peaking in a week-long blockade of Bangkok's airports.

The airport protests left around 350,000 travellers stranded in the kingdom and the previous government said Thailand lost nearly US$4 billion in revenue as a result of the occupation.

Despite the growing problems, Mr Abhisit said that compared with the rest of the world Thailand was 'relatively well positioned' to weather the downturn, but added that it was a 'very opened economy'.

It had already started feeling the effects of problems in its trading partners, which include the United States, Europe and Japan, with exports dropping for the first for six years in November, he said.

Mr Abhisit said that around a third of the 300 billion baht stimulus package would be be directed towards agriculture and efforts to tackle unemployment, with one million jobs at risk in 2009.

Another third would be used to 'carry on with dealing with the crop price problem that's starts hurting farmers', Mr Abhisit said.

The remaining 100 billion, much of which was money that had not yet been spent by local authorities, would be used for other projects possibly including 'incentives in terms of tax exemptions,' he added.

Mr Abhisit downplayed the likelihood of serious social problems from the economic troubles, saying that after the 1997 crisis 'we've had experience in dealing with that'.

'We've got a structure that is fairly well diversified so leaving aside the impact of the political problems, in terms of the fundamentals I think we should be able to deal with the crisis,' he said. -- AFP