Thailand's Industrial Production Growth Accelerates Amid Record Shipments
Thailand’s industrial production growth accelerated in June as exports surged to a record level, adding to signs of Asia’s resilience to the threat of weaker demand from Europe.
Manufacturing output rose 21.3 percent from a year earlier, after a revised 17.5 percent gain in May, the Bank of Thailand said today. The median estimate of 16 economists in a Bloomberg News survey was for an 18.5 percent increase.
The central bank last week raised its forecast for Thai economic growth this year to as much as 7.5 percent, which would be the strongest pace since 1995. A rebound in overseas sales has limited the impact from deadly political protests, supporting revenue at companies including Siam Cement Pcl, which is targeting 20 percent to 25 percent sales growth this year.
“The capacity utilization and production momentum in the export-oriented sectors are quite strong,” said Rahul Bajoria, an economist at Barclays Capital in Singapore. “The momentum is likely to slow down in the second half as global growth indicators moderate, but will remain sticky. We see upside risks to our 6 percent growth target in 2010.”
The finance ministry said yesterday it expects Southeast Asia’s largest economy after Indonesia to grow 8 percent in the second quarter, even after clashes between state troops and anti-government protesters in April and May claimed 89 lives in the nation’s worst political violence in almost two decades.
Rate Increase
The central bank on July 14 raised its benchmark interest rate for the first time in almost two years to 1.5 percent, joining neighbors from Malaysia to India in boosting borrowing costs as the region’s economic recovery strengthened.
South Korea’s industrial output rose more than forecast in June, expanding 16.9 percent from a year earlier, a report showed today.
Thailand’s exports jumped 47.1 percent in June from a year earlier to a record $17.9 billion, the central bank said today. Imports rose 38.3 percent last month, and the country had a trade surplus of $2.5 billion in June, compared with a $2.3 billion surplus the previous month.
“The economy has resumed its growth momentum after a slowdown in May during the political unrest,” Mathee Supapongse, the central bank’s director for domestic economy, said at a news conference today. “If exports continue to do well, investment, particularly in auto and electronics sectors, should maintain good growth.”
Thailand recorded a current-account surplus of $681 million last month, from a $1.04 billion surplus in May. The measure comprises the difference between exports and imports of goods and services, investment income and remittances. Trade makes up about 70 percent of the current account, and tourism contributes most of the service industry’s 30 percent component.
To contact the reporter on this story: Suttinee Yuvejwattana in Bangkok at Suttinee1@bloomberg.net
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