Premier Thaksin Shinawatra said gross domestic product (GDP) grew to 7.1 trillion baht (178.5 billion dollars) last year and he saw a further rise to possibly 7.7 trillion baht (193.5 billion dollars) in 2006.
Investors reacted positively to Thaksin's figures, which would translate to a gain of some 8.0 percent, with share prices on the Stock Exchange of Thailand composite index closing up 0.62 percent.
Thaksin, speaking to some 480 business leaders at government house, said he would unveil a slate of reforms aimed at boosting the economy after what he described as a tough 2005.
"What we faced last year was very tough. The tsunami aftermath affected the tourism sector and we are still trying to recover," he said, referring to the December 2004 waves which devastated Indian Ocean countries.
Thaksin said the government could keep bird flu in check while the unrest that has killed more than 1,000 people in Muslim-majority southern provinces would not affect the national economy.
"The southern unrest is not a serious problem any more," he said.
"After three rounds of bird flu, the government understands how to tackle the outbreaks," he added.
Fourteen people have died from the deadly H5N1 bird flu virus since January 2004 amid concerns it could spread more widely and easily.
The premier did not detail his reform plans but said they would include legal reforms to improve transparency and good governance in Thai companies.
He also said the government would invest in tourism, while encouraging farmers to boost productivity and switch to high-profit crops like rubber, which currently attract high global prices.
"All reforms are aimed at providing platforms for the private sector to operate more smoothly this year after we faced tough times together in 2005," Thaskin said.
Thailand projects its exports will grow 17 percent this year to about 130 billion dollars from 98 billion dollars in 2005, Thaksin said.
Foreign direct investment could reach 800 billion baht (20.1 billion dollars), he added.
Thaksin warned at the same time that Thailand's trade figures could worsen unless it signed a free-trade agreement with the United States as negotiators meet in the northern city of Chiang Mai for a sixth round of talks.
"If we do not establish a free trade agreement with the United States, Thailand could face a massive trade deficit," Thaksin said.
"If our exports to the United States are not competitive, our trade deficit would become very huge," he said.
The United States is Thailand's biggest trading partner with two-way trade reaching 23.9 billion dollars in 2004, up nearly 11 percent from 2003.
Thaksin noted the jump in inflation to 4.5 percent last year, blaming the increase on high global oil prices and said he was worried about a possible labor shortage, with unemployment at under two percent.