BANGKOK (Reuters) - Thailand's finance ministry has lowered its 2023 economic growth outlook to 3.5% from 3.6% projected earlier, as tourism gathers strength but tepid global demand crimps exports, officials said on Wednesday.

Exports, a key driver of the Thai economy, are forecast to contract 0.8% this year, compared with a previous forecast for a 0.5% drop, Pornchai Thiraveja, head of the ministry's fiscal policy office, told a briefing.

Southeast Asia's second-largest economy has been supported by increased domestic consumption and a recovery in the tourism sector, officials have said.

The economy expanded by a more-than-expected 2.7% in the first quarter from a year earlier. Last year's economic growth was 2.6%.

The ministry maintained a forecast of tourism arrivals of 29.5 million foreign tourist arrivals this year, Pornchai said.

Pre-pandemic 2019 saw a record of nearly 40 million foreign tourists, who spent 1.91 trillion baht ($55.43 billion). Tourism accounted for about 12% of gross domestic product (GDP).

The ministry predicted average headline inflation at 1.7%this year, compared with 2.6% projected earlier, and against a 24-year high of 6.08% last year.

It forecast the baht level of 34.01 baht per dollar this year.

($1 = 34.46 baht)