Dec. 23 (Bloomberg) -- Thailand's new government may increase spending by 80 percent to spur an economy hurt by the global recession and domestic political strife, Finance Minister Korn Chatikavanij said.

The government may boost additional spending already approved in November to as much as 180 billion baht ($5.2 billion) for the year ending Sept. 30, from the 100 billion baht that the former government budgeted, said Korn, who was appointed finance minister Dec. 20.

“Reviving the economy is one of the government's key policies,” Prime Minister Abhisit Vejjajiva said today at the conclusion of the first cabinet meeting following his election by parliament last week. Southeast Asia's second-biggest economy may shrink this quarter, the first such contraction since 1999.

“In the current climate of falling confidence, what will have a good effect is the fiscal stimulus,” said Carl Rajoo, an economist at Forecast Singapore Pte. The economy's ``deteriorating condition is looking quite severe.”

The government will announce its policies to the parliament on Dec. 29 and Dec. 30 and may hold a special cabinet meeting to approve the economic stimulus package at the last business day of this year, said Abhisit, Thailand's third premier in four months.

The proposed spending will need parliament approval, Korn said. The funds would be in addition to the 1.84 trillion-baht budget for the year that started Oct. 1.

“Additional spending is needed to prevent the economy from worsening further,” Korn said in Bangkok today. “The government also plans urgent measures to mitigate the impact of the economic slowdown on unemployment.”

Anti-government protesters ended their eight-day blockage of the country's main international airport on Dec. 3 following the removal of Prime Minister Somchai Wongsawat.

To contact the reporter on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net.

Last Updated: December 23, 2008 02:14 EST