The economy is expected to bound back next year, but the government may need to inject more money into the economic system if the economy remains stubbornly in the doldrums, says Finance Minister Apisak Tantivorawong.

A wave of stimulus measures, the global economic pickup and a stable political situation at home will place the economy on the road to recovery next year, he said in an interview with the Bangkok Post, adding that unexpected factors such as the more-severe-than-expected drought could delay the rebound.

Mr Apisak said if economic woes did not deepen, the governments recent measures to put money quickly and directly into the hands of low-income earners in rural areas who had been hit by soft farm prices amid the stuttering economy would be enough to drive growth.

A 136-billion-baht stimulus package to aid rural residents emerged as the first measure since Deputy Prime Minister Somkid Jatusripitak and his team including Mr Apisak took the helm late last month.

The measures comprise a 1-million-baht no-interest loan for two years to 59,000 Village Funds, a 5-million-baht budget for7,255 tambonsto implement any project related to building or repairs in the area and development projects in line with the sufficiency economy as well as acceleration of budget disbursement for small projects worth less than 1 million baht nationwide.

The central bank last week trimmed the economic growth forecast for this year to 2.7% from 3%, saying the recent stimulus measures to help rural people would not be sufficient to offset completely the impact from ebbing exports, domestic consumption and private investment.

Next years GDP growth estimate was also slashed to 3.7% from 4.1% projected previously.

However, the Bank of Thailands revised-down GDP forecast does not take into account another stimulus measure to help small and medium-sized enterprises (SMEs).

One week after the stimulus measures to assist rural residents were launched, the government approved measures to help SMEs gain better access to fresh financial sources from banks. Moreover, privileges to stimulate investment and for the property sector are on the cards.

Mr Apisak is optimistic the global economy has already bottomed out and said signs of recovery included the US economic rebound gaining pace.

Even though the US Federal Reserves rate lift-off is expected in the coming months and will trigger capital outflows from emerging markets, the Thai economy is expected to be able to cushion the headwinds thanks to high foreign reserves and low foreign debt, he said.

Mr Apisaksaid it could take awhile for Chinas cooling economy to gather recovery pace, but the worlds second-largest economy would still expand by no less than 7%, while the 19-nation euro zone was seeing some signs of improvement.

Meanwhile, the Finance Ministry will launch an infrastructure fund into which all projects will be pooled, and the government is likely to guarantee a return to attract investors.

The advantage of poolingfund-raising forall projects into one infrastructure fund is the government can raise funds for projects in which investors may not be interested such as greenfield projects, Mr Apisak said.

The government may offer some level of guaranteed return, possibly leading to a higher rating for the infrastructure fund and thereby enticing large funds to put money into it, he told a seminar hosted by the Stock Exchange of Thailand (SET) yesterday.

The infrastructure fund would be another fund-mobilising channel in addition to public-private partnerships toalleviate the governments burden of pouring hefty amounts into infrastructure projects.

The government is set to spend nearly 2 trillion baht in infrastructure projects through 2022 excluding water management.

The lions share of investment in the megaprojects will go to double-track railways, high-speed trains, electric trains and motorways.

In another development, Mr Apisak said he wanted foreign stocks to trade through the SET, with investors able to settle prices directly in other currencies.

The SET must coordinate with the Bank of Thailand on this issue. I think its possible to do so, as the country has free inflows and outflows, he said. If foreign stocks were tradeable on the Thai bourse, it would change the landscape of the SET -- brokers from neighbouring countries might shift their investment to Thailand, and our market could become an Asean hub.

The Finance Ministry is also mulling measures to jump-start local investment.