BANGKOK - TOURIST arrivals in Thailand may fall less than feared this year, but tax revenue may be worse than expected due to the severity of the economic slump, Prime Minister Abhisit Vejjajiva said on Tuesday.

'We had expected the arrivals number to fall 18 or 20 per cent, but the latest projection is 11 per cent,' Mr Abhisit told reporters after a weekly cabinet meeting.

POOR OUTLOOK Thailand has been hit by both shrinking demand for its exports due to the global economic slowdown and weak consumer confidence after months of political unrest. The government and central bank are in broad agreement on how to tackle the economy with a combination of interest rate cuts and fiscal economic measures, including tax breaks, cash handouts and cheap utilities and transport for the poor. ... more

He said tourism had started to recover after government efforts to promote the sector, which employs 1.8 million people and accounts for about 6 per cent of gross domestic product.

It was badly hit by a week-long siege of Bangkok's main airports in November last year by anti-government protesters, which caused massive damage to the tourist and trade sectors.

Arrivals in the first 11 months of 2008 rose 1.7 per cent from a year earlier to 13.17 million, much lower than the government had forecast before the political unrest started.

That compared with a 4.65 per cent rise to 14.46 million for the whole of 2007.

Illustrating the impact of the airport closures, tourist arrivals dropped 21.2 per cent in November - the start of the peak season - from a year before, after a 6.5 per cent fall in October, official data showed.

Mr Abhisit said tax revenue could fall at least 150 billion baht ($4.2 billion) below target in the current fiscal year to the end of September due to the global crisis.

In January, Finance Minister Korn Chatikavanij said tax revenue could fall 130-140 billion baht below the target of 1.59 trillion baht.

In the first five months of the fiscal year (October-February), taxes missed the target by 16.4 per cent, with 452 billion baht collected. -- REUTERS