Thai economy begins to recover in Q2 with 4.9-pct contraction

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Thailand’s economy has recovered in the second quarter of this year from a recession during the first quarter, with a positive quarterly growth expected in the last quarter, according to the National Economic and Social Development Board (NESDB).

Dr.Ampon Kittiampon, secretary-general of the state planning agency NESDB, yesterday said the gross domestic product (GDP) in the April-June quarter contracted by 4.9 percent when compared with the corresponding period last year after it had fallen by 7.1 percent in the first quarter.

During the second quarter, Dr.Ampon said, the country’s seasonally adjusted GDP however expanded by 2.3 percent after the contraction of 5.9 and 1.8 percent respectively in the forth quarter of last year and the first quarter of this year, suggesting that the Thai economy has already bottomed out and was improving in the second quarter.

The chief of state planning agency said Thai exporters received more orders until the year end, particularly electronic goods and furniture exported to China, Taiwan, South Korea and India as gains in the world economy have started to have a positive impact on Thai trade.

Household spending in June increased 2.6 percent, compared with that of May, resulting from the government’s economic stimulus packages, which bolstered consumers’ purchasing power, he said.

Government spending in the second quarter also expanded by 5.9 percent, up from 3.6 percent in the first quarter, while the public investment grew 9.6 percent from 9.1-percent contraction in the first quarter.

The industrial production in the second quarter contracted by 8.4 percent, satisfactorily improving from the contraction of 14.4 percent in the first quarter.

Imports declined by 27.5 percent, recovering from 35 percent recorded in the first quarter because the private sector were more confident in the economy and imported raw materials to manufacture goods for exports.

In the second quarter, he said, the seasonally adjusted export volume and value increased slightly from the first quarter by 0.5 and 1.4 percent respectively. In June, the total value of exports increased from May by 2.7 percent, thanks to a 1.4 percent increase in price and 1.5 percent increase in volume.

The NESDB, he said, believed the Thai economy will likely to continue on its recovery trajectory in the second half of this year and the positive quarterly growth, when compared with the same period last year, is very likely to return in the fourth quarter, due to the inventory cycle as well as global and domestic policy stimulus.

The agency then has revised its economic growth forecast for 2009 that the country’s GDP is likely to contract between 3-3.5 percent.

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