BANGKOK, 31 July 2012 – The Fiscal Policy Office (FPO) has announced that the nation’s second-quarter economy has expanded less than anticipated thanks to the effects of the European debt crisis.
FPO Macro-economic specialist Kulya Tantitaemit reported that the Thai economy in the second quarter expanded by less than three percent, which was lower than expected. She explained that the European debt crisis had made a negative impact over the Thai export sector in June.
The decrease was mainly from the European, Japanese, and Hong Kong markets. The export contraction also affected the industrial sector, which, in turn, led to a drop in electronics, electrical appliances, textile, and garment productions.
According to the FPO, the overall GDP this year will expand by 5.7% year on year, citing several positive factors in the second half such as domestic consumption and investment, which are expected to expand as a result of government spending.
Nevertheless, Ms. Kulya said the economy must expand by 10% in the second half in order to achieve the 5.7% growth earlier anticipated. The figures in June were worrying. Reports said industrial confidence index is at 102.7, the lowest in seven months due to production costs increase and people’s concerns over political uncertainties, natural disasters, and the European debt crisis. She said the FPO may have to revise its GDP figures and export forecast again in September.
The macro-economic specialist said that the European debt crisis remained the negative factor affecting the expansion, while the Chinese and Indian slowing economies must also be monitored closely.