BANGKOK: Thailand's finance ministry again trimmed its growth forecasts for this year and the last on Thursday, when fresh factory output data provided more evidence that the economy remains wobbly.
The ministry now sees 2015 economic growth at 3.9 percent, compared to its December forecast of about 4 percent and an October projection of 4.1 percent.
For 2014, whose full-year GDP growth rate will be announced on Feb. 16, the ministry reduced its projection to just 0.7 percent, from 1 percent in December.
The reduced forecasts reflect how two main engines of Thai growth - exports and domestic demand - still are in low gear eight months after the army seized power to end political tension and try to spur economic recovery.
"The economy should improve this year but may not be as good as expected, given global risks. Much will depend on government spending," said Pimonwan Mahujchariyawong, economist with Kasikorn Research Center in Bangkok. "There are still many downside risks."
Exports, which equal more than 60 percent of gross domestic product(GDP), in December rose 1.9 percent from a year earlier, stronger than expected.
But that wasn't enough to generate an annual increase in December for factory output, much of which goes into exports. Output fell for a 21st straight month, though by the smallest percentage during that streak, 0.35 percent.
The Industry Ministry, which gave December data on Thursday, said output declined 4.6 percent in 2014 from the previous year before rising 3-4 percent this year.
EXPORTS DOWN in 2014
On Monday, the government reported that exports dropped 0.4 percent in 2014, the second year of decline. The central bank expects a rise of only 1 percent this year.
The central bank says the economy is improving - it expected 4 percent growth this year - but with commodity prices expected to remain weak and soft demand seen from China and Europe, the growth outlook for this year remains cloudy.
Growth this year "will be mainly driven by government infrastructure projects. We will also have tourism, which is expected to improve," Kritsada Jinavijarana, director-general of the Finance Ministry's Fiscal Policy Office, told reporters.
An illustration of growth woes is the auto sector, as Thailand is a regional hub and export base for global automakers. Sector output in 2014 slipped 23.5 percent, according to the Federation of Thai Industries (FTI).
Domestic auto sales tumbled 21.4 percent in December from a year earlier and were down 33.7 percent in 2014, hit by the slowing domestic economy and delays in government spending.
Production is expected at 2.2 million vehicles this year, up from about 1.88 million in 2014, according to the FTI's Auto Industry Club
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