Source: AFP
Thailand’s economy suffered a double-digit contraction in the fourth quarter of 2011, the sharpest on record, after the kingdom’s worst floods in half a century pummelled industry.
Gross domestic product (GDP) shrank 10.7 per cent in the October-December period from the previous quarter, according to the National Economic and Social Development Board. GDP fell 9.0 per cent compared with the same period in 2010.
It was the sharpest drop in a single quarter since comparable records began in 1993, according to Apichai Thamsermsukh, an official at the government agency.
The 1997-98 Asian financial crisis saw smaller quarterly declines but over a longer time period, he said.
“This is an unusual drop caused by the manufacturing sector,” Apichai added.
For the whole of 2011, Thailand’s economy expanded by 0.1 per cent, after an increase of 7.8 per cent in 2010, the figures showed, missing analyst forecasts.
But the government and analysts are optimistic about prospects for a rebound, with Finance Minister Kittiratt Na-Ranong predicting last week that the export-dependent economy could grow by 7.0 per cent in 2012.
“Last year’s floods severely affected the Thai economy, but the contraction is only temporary,” said Standard Chartered economist Usara Wilaipich. “There will be an economic recovery this year, driven by domestic demand and manufacturing, which are rebounding.”
But she said the revival would be slow in the first half of 2012 because industrial production and exports would take time to recover to normal levels, while the global economic outlook remains uncertain.
“Semiconductor makers in particular need to import and install new machines to replace those damaged by the flood. I think their operations will be back on track in the third quarter.”
Investors took the weak data in their stride, with Thai stocks up about 0.7 per cent in early afternoon trade on optimism about the Chinese economy and prospects Greece will secure a long-awaited bailout to avert a debt default.
