* Income losses expected at 2.6 trn baht in 2020-2022
* Jobless numbers seen at 3.4 mln this year
* Fiscal steps a must as interest rates 'blunt tool'
* Governor keeping 0.7% GDP growth outlook this year (Recasts, adds detail, quotes)
BANGKOK, Aug 16 (Reuters) - Thailand needs a further 1 trillion baht ($29.9 billion) in fiscal steps to help jobs and income losses, the country's central bank governor said on Monday, as the Southeast Asian nation struggles with its most severe COVID-19 outbreak to date.
Thailand's has seen a spike in cases and deaths, prompting tougher containment measures to be extended this month and expanded to areas which account for around 80% of gross domestic product.
The projected 1 trillion baht in fiscal support, or 7% of GDP was reasonable given the problems the economy is facing, Bank of Thailand Governor Sethaput Suthiwartnarueput told a news conference.
The problems were worse than the 1997/97 Asian financial crisis, he said.
"With such severe symptoms, the medicine must be strong and right to the point," he added.
The government's fiscal position is strong and is able to borrow more to help the economy, Sethaput said.
The outbreak created a huge "income hole" in the Thai economy, with income losses expected at 2.6 trillion baht - 1.8 trillion baht in 2020-2021 and 800 billion baht in 2022, Sethaput said.
Jobless numbers are expected at 3.4 million at the end of 2021, up from 3 million in the second quarter, he said.
The central bank maintained its 0.7% GDP growth outlook this year despite a better-than expected second quarter, he said.
While monetary policy and financial conditions will remain accommodative, he reiterated that interest rates were a "blunt tool".
The BOT will ensure the baht will not impede the economy, Sethaput said, as it had depreciated by 10% this year, making it Asia's worst performing currency. ($1 = 33.41 baht) (Reporting by Orathai Sriring, Kitiphong Thaichareon and additional reporting by Satawasin Staporncharnchai; Editing by Martin Petty)
