(Updates with economist’s comment in fourth paragraph.)
Sept. 28 (Bloomberg) -- Thailand’s industrial output rose more than estimated in August as demand for autos recovered following the March earthquake in Japan, the Southeast Asian nation’s biggest trading partner.
The industrial production index rose 7 percent from a year earlier, the Office of Industrial Economics said in a statement today, compared with a revised 0.7 percent contraction in July. The median of 12 estimates in a Bloomberg News survey was for a 4 percent increase.
Thai exports, which account for about 60 percent of the economy, have so far weathered risks from a faltering global recovery, with shipments surging 31 percent to a record $21.6 billion last month. Sustaining that rate of growth may be difficult as Europe’s debt crisis and a struggling U.S. economy dim the prospects for Asia-Pacific exporters.
“The outlook is still gloomy,” Pimonwan Mahujchariyawong, an economist at Kasikorn Research Co. in Bangkok, said before today’s report. “Problems in the U.S. and Europe will lead to weak demand and will eventually affect our sales and production later this year.”
The Bank of Thailand may cut its economic growth projections as the global recovery falters, Governor Prasarn Trairatvorakul said on Sept. 24.
Auto production by companies including Toyota Motor Corp. and Ford Motor Co. jumped 15.5 percent in August as carmakers responded to pent-up demand, the state agency said. Total annual production is forecast at 1.8 million units, including expected domestic sales of 900,000 units, it said.
Hard-disk drive production increased 17.3 percent last month, boosted by new products, and rubber output gained 13.9 percent on demand from local automakers and buyers in China, the Office of Industrial Economics said.
Thai exports are expected to expand about 20 percent this year, surpassing an earlier target of 15 percent, the Commerce Ministry said Sept. 22. Shipments may increase by 15 percent next year, Commerce Minister Kittiratt Na-Ranong said today.
Prime Minister Yingluck Shinawatra has pledged to boost the daily minimum wage to 300 baht ($10), almost double the current level in some parts of the country. The Cabinet this month approved wage and salary increases for government officials as well as tax incentives for first-time buyers of homes and cars to help bolster consumption.
The Federation of Thai Capital Market Organizations, a six- member group that includes the Stock Exchange of Thailand, earlier this week urged the government to review the planned wage increase because of concern it would hurt exports.
--With assistance from Michael Munoz in Hong Kong. Editors: Tony Jordan, Stephanie Phang
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