Thailand's economy expanded unexpectedly in the first quarter of 2012, following a flood-related slump in the fourth quarter of last year, the latest official figures showed Monday.
The gross domestic product grew 0.3 percent year-on-year in the first quarter against economists' expectations for a 0.9 percent decline. This followed a revised 8.9 percent contraction in the fourth quarter of 2011, the National Economic and Social Development Board (NESDB) said.
After seasonal adjustment, the Thai economy grew 11 percent quarter-on-quarter. This comes after a revised 10.8 percent contraction in the previous three-month period.
The latest expansion in economic activity was driven by a recovery in manufacturing, consumption, investment, and tourism following flood-related declines in the previous period. Moreover, industrial production and exports also continued to recover.
The planning agency maintained the growth projection for 2012 at 5.5 - 6.5 percent. Growth will be supported by acceleration in manufacturing production as well as recovery of domestic consumption and investment, the NESDB said in a report.
Household consumption expanded 2.7 percent year-on-year and private investment rebounded, growing 9.2 percent. The rate of contraction in manufacturing activity slowed to 4.2 percent. Export value fell at a slower pace of 4 percent during the three months through March.
The agency said inflationary pressure may start to soften as energy prices are expected to slow down in the second half of the year. NESDB maintained its inflation projection for 2012 at 3.5 - 4 percent.
Earlier this month, the Bank of Thailand kept the benchmark interest rate unchanged at 3 percent after reducing it by a quarter point each in November and January. The Monetary Policy Committee of the bank said the recent easing of monetary policy contributed to a faster-than-expected broad-based recovery.
The MPC also noted that external factors continue to be a major risk to growth. However, the central bank lifted the 2012 growth outlook for the economy to 6 percent and forecast a 5.8 percent growth in 2013.
The International Monetary Fund forecast economic growth to be 5.5 and 7.5 percent in 2012 and 2013, respectively. However, the Fund warned against significant downside risks, stemming from the unsettled global scenario and internal political uncertainties.
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