The recent flood crisis hit November's factory production and exports harder than the Bank of Thailand had hoped, says a senior economist.
Mathee Supapongse said the central bank's economic indicators announced yesterday showed manufacturing contracted in every industry due mainly to the shutdown of operations in the flooded industrial estates.
That plus supply chain disruptions and damage to transport networks caused the manufacturing production index to shrink by almost 50% year-on-year in November compared with a 30% year-on-year contraction in October.
Farm production, which used to enjoy steady expansion, contracted to reflect rice losses in the Central region. A halt to automotive production caused rubber prices to decline in the month.
Overall, farmers overall suffered a 9.8% year-on-year decline in income.
"The economic impact from the floods may have peaked in November. It's the first time we've seen farm income contract by that much, and the industrial production index sank below our base year," said Mr Mathee.
But he expressed confidence that production of integrated circuits will resume in January and of hard-disk drives in the second quarter. Both products are key export earners.
Tourism was badly hit in November but is expected to recover in early 2012.
Exports contracted by 13% year-on-year to US$15 billion in November due to both the deluge and a slowdown in global demand, said Mr Mathee.
However, he said the contraction was still less than seen during the 2009 world financial crisis.
Imports at that time shrank by 19% year-on-year to 15 billion, a two-year low.
The central bank expects consumption to start showing a recovery in December and strengthen further in the first quarter thanks in part to government spending on future flood prevention.
November's economic losses could cause the central bank to downgrade its economic growth forecast for 2011 from 1.8%, said Mr Mathee.
However, its 2012 forecast is expected to remain at 4.8%..
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