Thailand’s industrial production fell for the fourth consecutive month last month as the worst flooding in almost seven decades hampered efforts to restart factories.
The industrial production index fell 25.8 percent from a year earlier, after a revised 47.2 percent contraction in November, the Thai Office of Industrial Economics said in a statement yesterday. The median of 11 estimates in a Bloomberg News survey was for a 30 percent decline.
The Bank of Thailand said this week a recovery in output might be delayed until the third quarter because the floods caused more damage to factories and supply chains than earlier estimated. The central bank cut interest rates for the second consecutive meeting on Wednesday to help support a rebound from the disaster as a deteriorating global economy threatens growth.
“We don’t expect the manufacturing index to turn positive until the second quarter as it will take some time for swamped plants to resume production,” Benjarong Suwankiri, an economist at TMB Bank PCL in Bangkok, said before the release. “There is still room for the central bank to lower the key rate further if the European economy deteriorates.”
The baht weakened 0.1 percent to 31.30 per US dollar as of 12:08pm. The benchmark SET Index rose 0.6 percent. The currency has slipped about 2.4 percent in the past three months and the stock index gained about 12 percent, the world’s best-performing benchmark after Venezuela.
Production of hard-disk drives slumped 55.7 percent last month, automobile manufacturing fell 30.4 percent and electronics output slid 55.9 percent, according to the Office of Industrial Economics.
Capacity utilization rose to 52.3 percent last month from 40.5 percent in November as floodwaters began to recede, allowing some factories to restart. The disaster killed more than 700 people and shuttered more than 16,000 factories.
Thai Prime Minister Yingluck Shinawatra has pledged to spend 350 billion baht (US$11.2 billion) on infrastructure to prevent a repeat of floods that cost the economy about 1.43 trillion baht.
Thailand’s economy, the biggest in Southeast Asia after Indonesia, might have contracted 5 percent last quarter from a year earlier because of the flood crisis, according to the finance ministry. Exports shrank 2 percent last month, compared with a 12.4 percent slide a month earlier, the commerce ministry said on Jan. 20.