BANGKOK, Aug 24 — Thailand's economy is expected to grow 3.5 per cent this year, up from 3.2 per cent initially predicted in April, and rising to 3.6 per cent next year, the World Bank said today.

South-east Asia's second-largest economy is gaining momentum as farm incomes recover from drought, merchandise and tourism exports rise and fiscal stimulus continues, the World Bank said in a statement.

In April, it predicted 2018 GDP growth of 3.3 per cent for Thailand.

"Thailand has the potential to raise growth to above 4 per cent by addressing structural bottlenecks — education equality, services liberalisation and public infrastructure management," it said.

However, risks to the economic recovery include political uncertainty, if reforms and elections become postponed, while a deterioration in the global environment, including increased trade protectionism and a slowdown in the Chinese economy may impede Thailand's export momentum and private investment recovery, the international lender said.

Thailand's economy expanded a better than expected 3.7 per cent in the second quarter from a year earlier, prompting the state planning agency to raise its 2017 growth projection to 3.5-4.0 per cent from a range of 3.3-3.8 per cent. — Reuters