BANGKOK: Thai factory output dropped for a 17th straight month and a central bank index showed consumption slipped in August, the latest signs that the country's economy is still sputtering.
The numbers released on Tuesday confirm that the key engines of growth - exports and consumption - are not yet driving it months after the military took power. Economists say this is putting more pressure on the government to jack up spending to try to spur growth.
August export data released on Monday had showed shipments were 7.4 percent lower a year earlier, including a 14.4 percent slump to China, Thailand's most important market.
On Tuesday, the Industry Ministry said factory output in August was down 2.66 percent from a year earlier, less than July's revised 5.3 percent fall and a Reuters poll forecast of 4.5 percent.
Hours later, the Bank of Thailand (BOT) released some August data and indexes, including one showing that private consumption - which accounts for half of the Thai economy - declined a seasonally-adjusted 0.2 percent in August from the previous month, when it rose a revised 1.0 percent.
A BOT index on private investment fell 1.2 percent in August from July.
The central bank is not concerned about the latest data as that is usually volatile in the early stages of economic recovery, Roong Mallikamas, a senior BOT official, told a briefing.
She said the central bank still expects a 'V-shaped' recovery but it might not be as strong as earlier anticipated. "The key impetus for the remaining year is government spending," she said.
QUESTIONS ON OUTLOOK
Others are not so sanguine about recovery.
Benjamin Shatil, economist with JP Morgan in Singapore, said, "the latest set of weaker-than-expected economic indicators is casting a shadow over the tentative recovery in the economy, and do raise questions over the outlook into year-end."
Shatil agreed that government spending needs to be the main policy driver in coming months, adding he expects "an acceleration in fiscal spending to support growth".
The army said it had to take power to end protracted political turmoil and to get the battered economy going again.
Southeast Asia's second-largest economy avoided a recession in April-June but recent indicators show pillars including exports remain weak, so there are doubts sustainable economic recovery has started in the wake of a military coup in May.
In August, imports plunged 14.2 percent, the Commerce Ministry said on Monday. The central bank, which always issues its own trade numbers, said on Tuesday August exports were down 6.6 percent and imports off 8.3 percent - both better than the Commerce Ministry's numbers..
The central bank still expects 2014 economic growth of 1.5 percent. On Sept. 26, it cut its forecast for 2015 growth to 4.8 percent from 5.5 percent.
Thammarat Kittisiripat, economist with TMB Bank, said August's improved output data "might come from a base effect or better economic activity. It's rather a fragile recovery from a bad situation, which does not necessarily mean things are really getting better. We think factory output data will still be negative this year."
A NEED TO HURRY
As exports are weak, "the government needs to rush to introduce measures to spur growth, otherwise an economic recovery will be delayed," he said.
Factory output is a significant gauge of Thai activity, as much of it goes into exports, which equal more than 60 percent of the economy. Thailand is a regional hub and export base for global automakers and a major producer of hard disk drives.
The Industry Ministry blamed the August output decline - the smallest since the string of annual falls began in April 2013 - on weaker production of cars, jewellery, sugar, petroluem and clothing. Production of cars fell 27 percent while electrical and electronics production increased 10 percent.
Thailand's economy grew 0.9 percent in April-June from the prior period, averting a recession. In the first half, it contracted 0.1 percent from a year earlier.
In a statement Tuesday, the central bank said the economy "continued to improve on the back of domestic demand and the tourism sector although growth momentum in August 2014 declined slightly as public and private spending softened after having accelerated during the initial period of political change."
"Improvement in private investment was still precarious and not broad-based as overall demand remained below its normal trend, in particular the slow recovery of exports," it said.
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