On a seasonally adjusted basis, GDP contracted 0.6 percent from the previous quarter, marking the first quarter-on-quarter contraction in four years, the National Economic & Social Development Board said. The Thai economy grew at only a 3.3 percent annual rate in the first quarter of 2005 over the same period last year.
The first-quarter growth compared with an overall growth of 6.1 percent in 2004 and 5.3 percent in the previous quarter. The slowdown has been attributed to the oil price rise, drought, higher interest rate and a decrease in inventories. The government agency has now cut its 2005 growth forecast to as little as 4.5 percent from the 5.5 percent it had projected earlier.
Thailand has been going through one of its worst droughts in three years, which has sharply cut down the output of farms and food-processing factories. Farm output fell 5.1 percent, compared with a 1.2 percent contraction in the fourth quarter of last year. Over 75 percent of the population live off the farm and food-processing sectors. Rice production dropped 34 percent in the period and sugar-cane output fell 31 percent. Thailand is the world's biggest exporter of rice and second-biggest exporter of sugar.
The report did not specify the losses incurred in the important tourism industry by the tsunami. Thailand was (is?) the favourite Far East destination of European tourists.
GRAPH: The Bangkok Stock Exchange climbed after the tsunami shock due to the expectation of increased construction spending before worries about the economy sent it lower again. Chart courtesy of Yahoo!