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Thailand in technical recession
BANGKOK: Thailand's economy slipped into a technical recession in the third quarter, reinforcing signs of an Asia- wide slowdown as export growth cools, manufacturing ebbs and the impact of massive government stimulus spending fades.
South-east Asia's second-biggest economy shrank 0.2 per cent in the third quarter after a revised 0.6 per cent contraction in the second, data showed yesterday, reducing chances of another interest rate rise next month.
The data reinforces signs of a slowdown across much of the region, from North Asian export powerhouses China, South Korea and Taiwan to South-east Asian 'tigers' Thailand, Singapore and Indonesia. Strong growth in Asia has been one of the few bright spots in the struggling global economy.
Malaysia's economic growth also slowed more than expected - to 5.3 per cent in the third quarter from 8.9 per cent in the second - its central bank said yesterday, noting that growth in the second half of the year and in early next year was moderating.
OCBC economist Gundy Cahyadi said growth almost stalled in the third quarter from the previous period, although few analysts gave quarter- on-quarter figures.
Figures last week showed Taiwan's economic growth slowing in the third quarter, while Singapore's trade-reliant economy shrank 18.7 per cent and Indonesia reported this month its first slowdown in annual growth in five quarters.
From a year earlier, Thailand grew 6.7 per cent in the quarter, largely in line with economists' forecasts and slowing from growth of 9.2 per cent in the second quarter, the data from the state planning agency showed.
'Looking forward, we expect weaker global demand to bring Thailand's economic growth to below trend in the fourth quarter of 2010, and in the first half of 2011,' said Mr Usara Wilaipich, a Bangkok-based economist at Standard Chartered Bank.
The Asian slowdown has been exacerbated by the US dollar's slide, which has driven up regional currencies and started to erode export revenue. It is complicating efforts by Asia's central banks to return interest rates to normal levels after drastic cuts in the wake of the 2008 global financial crisis.
The Bank of Thailand is likely to keep its trend-setting one-day repurchase rate unchanged at 1.75 per cent at its next policy-setting meeting on Dec 1, said Mr Arkhom Termpittayapaisith, secretary-general of the National Economic and Social Development Board, Thailand's state economic planning agency. Private economists echoed that view after the release of the data, which was marginally better than a deeper 0.4 per cent contraction expected by most economists in a Reuters survey.
REUTERS
BANGKOK: Thailand's economy slipped into a technical recession in the third quarter, reinforcing signs of an Asia- wide slowdown as export growth cools, manufacturing ebbs and the impact of massive government stimulus spending fades.
South-east Asia's second-biggest economy shrank 0.2 per cent in the third quarter after a revised 0.6 per cent contraction in the second, data showed yesterday, reducing chances of another interest rate rise next month.
The data reinforces signs of a slowdown across much of the region, from North Asian export powerhouses China, South Korea and Taiwan to South-east Asian 'tigers' Thailand, Singapore and Indonesia. Strong growth in Asia has been one of the few bright spots in the struggling global economy.
Malaysia's economic growth also slowed more than expected - to 5.3 per cent in the third quarter from 8.9 per cent in the second - its central bank said yesterday, noting that growth in the second half of the year and in early next year was moderating.
OCBC economist Gundy Cahyadi said growth almost stalled in the third quarter from the previous period, although few analysts gave quarter- on-quarter figures.
Figures last week showed Taiwan's economic growth slowing in the third quarter, while Singapore's trade-reliant economy shrank 18.7 per cent and Indonesia reported this month its first slowdown in annual growth in five quarters.
From a year earlier, Thailand grew 6.7 per cent in the quarter, largely in line with economists' forecasts and slowing from growth of 9.2 per cent in the second quarter, the data from the state planning agency showed.
'Looking forward, we expect weaker global demand to bring Thailand's economic growth to below trend in the fourth quarter of 2010, and in the first half of 2011,' said Mr Usara Wilaipich, a Bangkok-based economist at Standard Chartered Bank.
The Asian slowdown has been exacerbated by the US dollar's slide, which has driven up regional currencies and started to erode export revenue. It is complicating efforts by Asia's central banks to return interest rates to normal levels after drastic cuts in the wake of the 2008 global financial crisis.
The Bank of Thailand is likely to keep its trend-setting one-day repurchase rate unchanged at 1.75 per cent at its next policy-setting meeting on Dec 1, said Mr Arkhom Termpittayapaisith, secretary-general of the National Economic and Social Development Board, Thailand's state economic planning agency. Private economists echoed that view after the release of the data, which was marginally better than a deeper 0.4 per cent contraction expected by most economists in a Reuters survey.
REUTERS
