But if the rally ends before March, there is a strong possibility that growth could be as high as 4%, he said.
Mr Thanong said he did not believe 2014 GDP growth would be in minus figures, even in the worst case scenario, because of the weakening baht and the fact the production sector had not been affected by the political turbulence.
But if the economy is to grow by 4% this year, exports must expand by 8-10%, he added.
The continuing political conflict had resulted in lost opportunities for economic recovery and an investment boom. Many companies had delayed investment plans to await how the situation develops, and many of them now planned to move production bases to other countries such as Indonesia and Vietnam, he said.
On the government’s rice scheme, he said the problem did not arise from the pledging process but from the pledged price, which was far above the global market.
The former finance minister said the outgoing government failed to tackle the problem at its root cause by setting a suitable price for pledged rice.
Mr Thanong said the new finance minister must carefully oversee fiscal policy because the most horrible things are the planned huge investment in the 2-trillion-baht infrastructure overhaul and the 350 billion baht water resources and flood management projects.
He warned that such a massive investment would rapidly increase the country’s overseas debt, and the public debt would certainly rise to 50-60% of GDP.
The former finance minister said the next government should implement macro-economic policies that allow business operators to stay competitive in the international community, increase export values and enable the country to play a leading role in Asean.
It should also facilitate the moving of labour-intensive projects to neighbouring countries where labour costs are lower. At the same time, Thailand must be open to new foreign investment inflow, he said.