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UPDATE 1-Thai economy seen back to 'normal levels' within two years-deputy PM

* Govt has used $25 billion to help virus-hit economy so far

* Plans more stimulus measures to boost consumption

* Public debt to rise, but still manageable - planning agency

* Economy to contract by record 8.5% this year - ministry (Adds quotes, public debt)

BANGKOK, Sept 25 (Reuters) - Thailand’s economy is expected to return to normal levels within two years as the government tries to mitigate the global impact of the coronavirus pandemic, a deputy prime minister said on Friday.

Southeast Asia’s second-largest economy is set to contract by a record 8.5% this year as the outbreak ravaged the key tourism industry and slowed consumption, the finance ministry predicts.

The government has used nearly 800 billion baht ($25 billion) in supporting the economy, Supattanapong Punmeechaow told a business seminar.

“I think the economy should get back to normal levels within two years,” he said. “But if we can manage it very well, we may see that late next year”.

The government will continue to introduce stimulus measures and plans subsidies under a “co-pay” scheme, rather than handouts, to help spur consumption, he said, without giving further details.

In a bid to cope with the impact of the outbreak, the government has introduced a 1.9 trillion baht response package, including a 1 trillion baht borrowing plan.

The borrowing will lift the public debt to GDP ratio to 57% from about 47% in July, still within a 60% cap, Danucha Pichayanan, a deputy head of the state planning agency, the National Economic and Social Development Council, told the seminar.

“The higher debt burden will reduce policy space... but the current debt level can still be managed and there is room for driving the economy,” he said.

Thailand has had a deficit budget for the past 10 years and must try to have a balanced budget at least over the next five-six years, Danucha said. ($1 = 31.51 baht) (Reporting by Satawasin Staporncharnchai Writing by Orathai Sriring Editing by Ed Davies)

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