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Thai Economy Shrinks More Than Expected
Feb 23,2009 00:00
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- Thailand's economy shrank more than expected in the fourth quarter of last year -- its first contraction in nearly a decade -- as the global slowdown shriveled demand for its key exports and domestic political unrest spooked its tourism sector. The economy will likely continue to shrink in the first three quarters of this year, a government think tank said, with a reversal likely to kick in only in the last three months of the year. Gross domestic product contracted 4.3% from a year earlier, resulting in full year GDP growth of 2.6%, the National Economic & Social Development Board said Monday. Seasonally adjusted GDP shrank 6.1% from the previous quarter. "The fourth quarter contraction is substantially beyond market expectation and this will likely prompt economists to revise down their forecast on Thailand's growth this year," said Nuchjarin Panarode, an economist at Capital Nomura Securities. The median forecast of eight economists polled by Dow Jones Newswires was for fourth-quarter GDP to shrink 2.8% from a year earlier and 3.7% from the third quarter. The poll forecast 2008 GDP growth at 3%. The board also cut its GDP forecast for this year to between zero growth and a contraction of 1.0% from previously projected growth between 3.0% and 4.0%. "The downward revision was due to a deeper-than-expected global economic slowdown, which severely and rapidly hurt Thailand's exports and tourism more than previously projected," Ampon Kittiampon, head of the National Economic and Social Development Board, said in a news conference. The Thai government's economic stimulus measures may help the economy skirt a contraction this year, he added. But Mr. Ampon cautioned that, with the government's supplementary spending budget yet to be disbursed and exports remaining weak, the economy will likely worsen in the first quarter. After shrinking in the first half of the year, "we will likely see a marginal contraction in the third quarter and then a positive figure in the fourth," partly due to a the low comparison with the current quarter, Mr. Ampon said. Due to a weaker global economic outlook and lower oil prices, the NESDB forecast Thailand's exports this year to fall 13.1% and imports to drop 14%, resulting in a trade surplus of $1.8 billion, compared with a $6.5 billion deficit projected three months ago. It also revised its forecast for the current account balance to a surplus of $2.3 billion from a deficit of $3.5 billion previously projected. The agency also trimmed its consumer price index forecast for this year to between -0.5% and +0.5% from a previously projected increase of 2.5%-3.5%. http://online.wsj.com/article/SB123536628210146587.html |