BANGKOK: Thailand's economy shrank 0.3 percent in the three months to June, the second quarterly contraction this year, as lacklustre demand hit manufacturing and exports, data showed Monday.
However, the slide from the previous quarter was better than the revised 1.7 percent contraction in the three months to March as the country recovers from devastating floods in late 2011 that swamped major factories.
On a year-on-year basis, gross domestic product (GDP) expanded 2.8 percent in the second quarter of 2013, weaker than 5.4 percent in January-March, the National Economic and Social Development Board (NESDB) said.
Manufacturing output eased 1.0 percent, with manufacturers hit by slowing domestic demand and ongoing global weakness, the NESDB said in a statement, as the US and China struggle to get up to speed.
Exports shrank 1.5 percent in the quarter from a year earlier.
In light of the latest figures that NESDB cuts its forecasts for 2013 GDP growth to 3.8-4.3 percent, from 4.2-5.2 percent projected in May, which was itself a downgrade from 4.5-5.5 percent previously estimated.
Analysts at Capital Economics warned the weak growth in the second quarter was likely to continue, adding: "We think a strong rebound in growth is unlikely. For a start, falling consumer confidence suggests the household sector is struggling."
However, it saw export growth improving, boosted by a gradual recovery in global demand combined with recent weakness in the Thai baht, which makes the country's exporters a more competitive.
In July Thailand's central bank kept its benchmark interest rate unchanged at 2.50 percent to bolster the economy.
The bank said a slowdown in China was hurting the international outlook, while domestic private consumption had weakened in the face of rising debt worries and the waning effect of measures to stimulate consumer spending.
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