Thailand’s industrial output grew in October more than expected compared to that in the same month last year, indicating an upswing in the manufacturing.
According to the data released Tuesday by the Office of Industrial Economics Thailand, the country’s industrial production, which measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities, rose 36.1 percent in October compared to that in the same month last year, up from a 15.9 percent fall in September and above the analysts’ expectation of 29.8 percent.
This report comes after it was reported earlier this month that Thailand’s economic growth slowed down in the third quarter compared to that in the previous quarter. The data published earlier this month by the National Statistical Office of Thailand showed that the country’s gross domestic product (GDP), which measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy, grew 3 percent in the quarter ending Sept. 30 compared to that in the same period last year, down from the 4.4 percent growth in the second quarter.
The report of the industrial production comes ahead of the policy meeting by the Bank of Thailand (BoT) to be held Wednesday, which will decide where to set the benchmark interest rate. Last month, the BoT cut its policy rate by 25 basis points to 2.75 percent.
Considering that Thailand’s export-led growth model has been affected by the persisting struggle of the global economy, it can be expected that the BoT will further cut the policy rate by 2013. Inflation is unlikely to be an obstacle for the central bank to ease the policy further.
The BoT noted that the downside risks to the global economy remained a key concern for Thailand’s central bank. While the recent policy easing in the major economies supported the financial markets, the BoT viewed the global economic outlook as remaining weak. The central bank cited the possibility of China’s economy slowing further, the U.S. falling off its fiscal cliff and an escalation in the euro zone crisis as all being significant downside risks for Thailand and the rest of emerging Asia.
Meanwhile, the government and the central bank are driving aggressive measures to push consumption and investment growth including extending the rice pledging scheme and the first home owner scheme.
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