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UPDATE 2-Thai Nov output, consumption fall as worries on politics grow

Orathai Sriring and Boontiwa Wichakul
Friday, 27 Dec 2013 | 4:03 AM ET

* Factory output -10.6 pct y/y in Nov, vs -4.0 pct in Oct

* Political tensions are affecting growth outlook, forecasts

* Current-account surplus in Nov widens to nearly $2.3 bln

* Nov private consumption index -1.2 pct m/m, investment -0.6 pct m/m

(Adds central bank data, details, quotes)

BANGKOK, Dec 27 (Reuters) - Thailand reported a fresh set of downbeat economic data on Friday, showing declines in factory output and consumption as political tension clouds the country's outlook for 2014.

Industrial output fell 10.6 percent in November from a year earlier, making an eighth straight month of decline. The fall was slightly smaller than predicted in a Reuters poll, but compared with a 4.0 percent drop in October.

Also, the Bank of Thailand reported its private consumption index dropped 1.2 percent in November from the previous month and 2.4 percent from a year earlier. Its private investment index fell 0.6 percent from October and 7.8 percent from November 2012.

Officials sought encouraging facets in the data. The Industry Ministry said the output fall was partly due to a high base last year when automakers were swamped with orders from a government car-subsidy programme that ended in 2012. Car production last month was 18.8 percent below a year earlier.

At factories, November capacity utilisation was 63.14 percent, barely changed from October's 63.46 percent

The central bank said that while November activities "softened" from the previous month, production in export-oriented industries expanded and tourism grew on an annual basis, in spite of political protests.

For output, "we expect another drop of 6-7 percent for December year-on-year," Somchai Harnhirun, head of the ministry's Office of Industrial Economics, told a briefing.

Output dropped 2.9 percent in the first 11 months of 2013 from a year earlier. Somchai said output could fall 3 percent this year, rather than 2.8 percent seen earlier, but the ministry still expects a 2 percent rise in 2014.

EXPORTS ARE PIVOTAL

Production tracks exports because industrial goods make up about 65 percent of total shipments, which equal more than 60 percent of Thailand's gross domestic product.

The central bank said on Friday that the November current-account surplus widened about six times to $2.29 billion, and exports dropped 4 percent in November from a year earlier.

Some Thai economic forecasts for 2013 have been cut - and 2014 ones are in jeopardy - because of the political crisis.

The Finance Ministry on Thursday saw 2013 annual growth of 2.8 percent, below the 3 percent target.

Protesters have rallied in Bangkok for two months in a bid to oust Prime Minister Yingluck Shinawatra. She has called an election for Feb. 2, which protesters are trying to thwart.

On Thursday, the government rejected a call from the Election Commission to postpone the vote after clashes between police and anti-government protesters in which two people died and nearly 100 people were hurt.

TOURISM, THAI MARKETS AFFECTED

The turmoil has hit financial markets and tourism, and sent Thai consumer confidence to nearly a two-year low in November.

Mathee Supapongse, a BOT senior official, said on Friday if the unrest is prolonged, it will affect confidence and government spending... and it's possible that next year (GDP) will be lower than our forecast."

Last month, the central bank cut its 2013 GDP growth forecast to about 3 percent from 3.7 percent and its 2014 estimate to around 4 percent from 4.8 percent.

Pimonwan Mahujchariyawong, an economist at Kasikorn Research Centre, remains hopeful the economy can grow at least 3.7 percent in 2014, but said if the political tension extended into the second half, that could cause a "domestic spending stall" that keeps growth to only 2.5 percent.

Gundy Cahyadi of DBS Bank in Singapore said the tension "has been a drag and this is well reflected in the weak data. The risk is that if this gets prolonged, there will be pressure on the central bank to keep rates low to support the economy."

Last month, the Monetary Policy Committee cut its benchmark rate by 25 basis points to 2.25 percent.

(Editing by Richard Borsuk)