The Thai economy has passed through the trough, according to the Bank of Thailand (BoT).
Several positive factors indicated the economy was headed for improvement, such as the global economic rebound, central bank deputy governor Bandid Nijathaworn said on Wednesday.
"I am confident that the country's gross domestic product will turn out positive in 2010 despite this year's high inflation pressure," he said.
He said the BoT will revise its economic growth estimate based on a realistic hypothesis on Friday.
The bank earlier expected the GDP to shrink by 1.5 to 3.5 per cent, but expected next year's economy to expand by 1.5 to 3.5 per cent.
"The liquidity in the monetary system is still adequate as it is five times higher than the BoT's standard, and commercial banks should see no problem in approving loans," Mr Bandid said.
He said nonperforming loans rose five per cent in April due to the seven per cent economic contraction in the first quarter, but the increase was not substantial.
The Finance Ministry's order for seven state-owned banks to make loans totalling 1.25 trillion baht for the entire year would help the private sector and stimulate the economy, the deputy governor said.
He said all state banks have enough liquidity, and financial problems can be avoided through good management.
Meanwhile, Finance Minister Korn Chatikavanij said the Revenue Department has announced an exemption from withholding tax on bank savings accounts which earn no more than 20,000 baht interest a year.
Altogether 62 million savings accounts would benefit from the tax exemption, which was aimed at increasing depositors' incomes, Mr Korn said.
Savings account owners who earn more than 20,000 baht a year interest could make an agreement with their respective financial institutions on whether to allow an immediate deduction of due tax or pay the tax themselves at revenue offices.