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Thailand Economy in Spotty Recovery

Thailand Economy in Spotty RecoveryThailand Economy in Spotty Recovery

Thailand’s factory output fell but exports and consumption rose, suggesting the economy is struggling to gain momentum after a coup ended months of political unrest five months ago.

Confronting weak demand both at home and abroad, the country’s military leaders are depending on infrastructure spending to prop up economic growth though most of the projects will not filter through to the bottom line until next year, Reuters said.

Economists say the mixed September data means the central bank will continue to keep interest rates low to support the fragile recovery.

“Overall, Thailand’s economy is seeing a gradual recovery but the environment is still weak in terms of household spending and private investment,” said Thammarat Kittisiripat, economist with TMB Bank in Bangkok.

 Consumption

Factory output in September fell for an 18th straight month, industry ministry data showed on Friday, down 3.92 percent from a year earlier, and compared with a forecast 0.50 percent drop in a Reuters poll.

Later, the Bank of Thailand (BOT) released other September indexes, including one showing that private consumption – which accounts for half of the Thai economy – rose a seasonally-adjusted 1.0 percent in September from the previous month.

Its index on private investment inched up 0.1 percent in September from August, the central bank said.

“In September, the Thai economy improved from the previous month. Overall, however, the recovery in economic activities remained at a slow pace,” it said in a statement.

“Economic activity in the third quarter of 2014 recovered at a slow pace and not in all economic sectors,” it added.

 Exports, Imports Rise

The commerce ministry released customs-cleared trade data which showed annual exports unexpectedly rose 3.2 percent in September and imports surprisingly jumped 14.4 percent, in a rare piece of good news for the military junta.

The central bank, which always issues its own trade numbers, said on Friday that September exports were 2.2 percent higher and imports rose 10.1 percent. Many imported materials are assembled into completed products and shipped out again.

However, the positive trade data is helped by special factors and the gains may not be sustained, economists say.

Financialtribune.com