BANGKOK: Thai factory output dropped less than forecast in August, but the 17th straight month of decline from a year earlier is the latest sign that the country's economy is still sputtering.
Factory output in August was down 2.66 percent from a year earlier, compared with July's revised fall of 5.3 percent the Industry Ministry said on Tuesday.
Initially, it put July's drop at 5.18 percent.
A Reuters poll had forecast a decline of 4.5 percent for August, during which exports fell a larger-than-expected 7.4 percent from a year earlier. Southeast Asia's second-largest economy avoided a recession in April-June weak recent indicators show key pillars of the economy - exports and consumption - remain weak, so there are doubts real economic recovery has started in the wake of a military coup in May.
In August, imports plunged 14.2 percent from a year earlier.
The army said it had to take power to end protracted political turmoil and to get the battered economy going again.
The central bank expect 2014 economic growth of around 1.5 percent, and expansion of close to 5 percent next year. Thammarat Kittisiripat, economist with TMB Bank said August's slightly 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."
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 exports 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 percentage-wise since the string of annual falls began in April 2013 - on weaker production of cars, jewellry, sugar, petroluem and clothing.
SPENDING BOOST?
August's capacity utilisation rate was 60.29 percent, little changed from 60.06 percent in July.
Industrial goods account for about 65 percent of total exports. The military government is seeking to fast-track long-dormant spending plans such as infrastructure projects.
Economic ministers have said the junta is planning measures, which are expected to be announced this week, to help growth at a time of weak economic pillars. Later on Tuesday, monthly data from the central bank is likely to show a small improvement at most in private consumption and still-sluggish private investment. Private consumption - which accounts for half of the economy, picked up in July for the first time in 11 months on a yearly basis. Auto sales are still tumbling - they were down nearly one-third in August - and retail sales growth is weak, curbed by high household debt levels. Thailand's export-reliant 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.
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