The ADB Tuesday lowered its 2012 gross domestic growth projection for Thailand from 5.5% to 5.2%.
For 2013, the bank also cut its growth forecast to 5% from its previous projection of 5.5%, the bank's senior economist Luxmon Attapich said.
Speaking at a briefing on the bank's Asian Development Outlook 2012 report, Ms Luxmon said the impacts of government's policies, which focus on stimulating consumption, will be unsustainable unless moves are made to improve productivity.
She cited the rice pledging programme as a good example of a policy that would fail to provide long-term positive impacts.
Ms Luxmon said the government would do better improving yields and marketing the country's quality rice breeds as Thailand has a strong niche in this segment of the rice market.
At yesterday's economic ministers meeting, Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong said he still believed the economy will achieve the 5.5% to 5.7% growth target despite the slowdown in exports.
"The economy can't rely on exports, which are suffering from the impacts of the global economic slowdown. But domestic consumption and investment continue to perform well and together with the government's plan to speed up budget disbursement this should help bolster growth," said Mr Kittiratt.
He said tourism is also performing well, with an estimated 20.5 million to 21.5 million foreign tourists visiting Thailand this year.
The ADB has also slashed its growth projection for developing countries in Asia to 6.1% from 6.9% and to 6.7% in 2013 from 7.2% in 2011.
The revisions reflect a slump in global demand that has also heavily weighed down the economies of China and India.
The sovereign debt crisis in the eurozone and risks of discontinuity of tax cuts in the United States after the federal election in November could have a serious spillover effect on regional economies in the near future, the ADB said.
Changyong Rhee, the ADB's chief economist, said the downturn in global demand could be protracted, but he does not believe the region needs to implement a large stimulus package as in 2008 after the sub-prime crisis.
"Developing Asia must adapt to a moderate growth environment and countries will need to do more to reduce their reliance on exports, rebalance their sources of growth and increase their productivity and efficiency," he said.
The ADB revised down China's economic growth to 7.7% this year but expects it to rebound to 8.1% next year.