Thai economy back in recession: official data


AFP

BANGKOK — Thailand’s economy has slipped back into recession, contracting for two consecutive quarters as a stronger baht and a weaker global economy put the brakes on exports, government data showed Monday. Gross domestic product (GDP) shrank by 0.2 percent in the three months through September from the previous quarter, when it contracted by a revised 0.6 percent, according to official estimates. A recession is usually defined as two or more consecutive quarters of negative economic growth. On a year-on-year basis, Thailand’s economic growth slowed to 6.7 percent in the third quarter, from 9.2 percent in April-June. The Thai economy had remained relatively resilient in the face of deadly political violence earlier this year, but it has not been immune to a slowdown in US and European economic growth as well as a slumping dollar. The Thai baht, along with other Asian currencies, has been surging against the greenback, hitting a 13-year high. A stronger currency undermines the competitiveness of Thai exports. Faced with an uncertain outlook, Thailand’s central bank held its benchmark interest rate steady at 1.75 percent in October, pausing after two consecutive rises in the cost of borrowing since July. Monetary policymakers are next due to meet on December 1. The kingdom has imposed several measures to curb the strength of the baht, including a tax for foreigners investing in Thai bonds. Export growth slowed to 15.7 percent in October from a year earlier, after a 21.2 percent expansion in September. Despite the recent contraction, the government upgraded its GDP growth forecast for this year slightly to 7.9 percent thanks to a strong performance earlier in the year. In 2009 the economy shrank 2.3 percent. In 2011, growth is expected to slow to within a range of 3.5-4.5 percent.