Thailand's economic growth will slow in 2011 exports fail

Thailand's economic growth will slow in 2011 exports fail, the Ministry of Finance said that after today's report showed manufacturing expanded less than a year.

"Growth next year will return to a normal pattern," said Naris Chaiyasoot, the head of the Office of Public Finance, Ministry of Finance of the political reporters in Bangkok. "Consumption and investment are key factors. Exports, which led the growth of this year, will be fragile given the weakening global economy."

The Ministry of forecast gross domestic product will grow 4.5 percent in 2011 and raised estimates for this year to 7.8 percent from 7.5 percent. Thailand's dependence on foreign trade, which represents about 60 percent of the economy makes it vulnerable to swings in global demand.

the manufacturing output growth slowed unexpectedly in November to 5.6 percent from a year earlier after a revised advance of 6 percent in October, according to the Office of Industrial Economics.
"Industrial growth slowed as the recovery in the U.S. and Europe weighs export demand of electronic products," Lim said Chandara, chief economist at Moody's Analytics in Sydney, before the report. "Setting monetary tightening could undermine private investment and slow production orders over the next month."

The baht has gained more than 10 percent this year, the best performer in Asia after the Japanese yen and Malaysian ringgit, raising concerns that exports of Thailand can be more expensive relative to its regional rivals.

Effect baht

General Motors, Ford Motor Co. and Banpu PCL are among the companies that have blamed the strong baht for hurting sales outside Thailand.

Finance Minister Korn Chatikavanij December 15, said the baht is likely to extend gains next year and capital flows will cause the volatile currency.

Earlier this month, the central bank raised its repo rate bond for a day in a quarter percentage point to 2 percent, indicating policy makers view inflation as a bigger threat than slowing growth. The governor said Prasarn Trairatvorakul Thailand December 24 can not have "low wages, a weaker baht and low interest rates forever."

the rapid growth of exports from Thailand to 28.5 percent in November, and shipments should increase by up to 28 percent this year, Commerce Minister Porntiva Nakasai said last week.

Naris The Finance Ministry said the economy probably grew 3.5 percent in the fourth quarter of last year after a jump of 6.7 percent in the last three months.