Amara Sriphayak, the central bank's senior director for domestic economy, said the Thai economy in 2009 will be affected by the global economic crisis because the country cannot rely on its export partners.

Exports account for almost 70 per cent of the Thai economy.

'Unemployment is expected to rise this year because Thailand's economic growth is expected to be low due to the global downturn,' she told AFP.

'The Bank of Thailand assumes that if the economy grows by zero and, in the worst case scenario, the labour market increases two per cent (with new graduates), 1.07 million people will lose their jobs,' she said.

That would represent 2.8 per cent of the total workforce, she said.

Ms Amara insisted however that the situation in Thailand was not as bad as in other countries, as the central bank reported in November that the current unemployment rate was only 1.4 per cent.

'The production sector is still choosing not to lay off but is opting instead to reduce working hours or cut salaries. Also the Thai workforce can switch to the agriculture sector,' she said. -- AFP