Thailand falls into recession, baht drops
Thailand’s gross GDP shrank 0.3 per cent in the second quarter 2013 from the previous quarter, when it contracted by 1.7 per cent, showing the economy has slipped into what experts call a “technical recession.”
A technical recession is typically defined as two consecutive quarters of contraction in GDP. It was the first recession since the sub-prime financial crisis started in 2008, when Thailand’s economy contracted 5 per cent quarter-on-quarter in the fourth quarter of 2008 and 2.5 per cent in the first quarter of 2009.
However, the economy grew an albeit meagre 2.8 per cent in the second quarter of 2013 from the same period in 2012.
All sectors of the economy except tourism grew at a slower pace. The agricultural sector expanded just 0.1 per cent, with a 7.9 decline in fisheries due to a shrimp disease. The manufacturing sector slowed by 1 per cent as external demand has not recovered and domestic demand has decelerated. For domestic expenditure, household consumption and investment grew at a slower 2.4 per cent and 4.5 per cent respectively.
The country’s National Economic and Social Development Board on August 19 cut its forecast for full-year GDP growth to a range of 3.8-4.3 per cent, from 4.2-5.2 per cent made in May. The body also lowered its export growth estimate to 5 per cent from 7.6 per cent.
All this sent share prices at the Stock Exchange of Thailand tumbling 3.27 per cent and dragged the SET index below 1,400 points.
The baht fell to a new one-year low at 31.64 to the dollar and 42.09 to the euro as of August 20 noon. Inflation slowed for a seventh straight month in July to 2 per cent on the back declining consumer purchasing power.
Thailand's gross GDP shrank 0.3 per cent in the second quarter 2013 from the previous quarter, when it contracted by 1.7 per cent, showing the economy has slipped into what experts call a "technical recession." A technical recession is typically defined as two consecutive quarters of contraction in GDP. It was the first recession since the sub-prime financial crisis started in 2008, when Thailand's economy contracted 5 per cent quarter-on-quarter in the fourth quarter of 2008 and 2.5 per cent in the first quarter of 2009. However, the economy grew an albeit meagre 2.8 per cent in the second quarter...
Thailand’s gross GDP shrank 0.3 per cent in the second quarter 2013 from the previous quarter, when it contracted by 1.7 per cent, showing the economy has slipped into what experts call a “technical recession.”
A technical recession is typically defined as two consecutive quarters of contraction in GDP. It was the first recession since the sub-prime financial crisis started in 2008, when Thailand’s economy contracted 5 per cent quarter-on-quarter in the fourth quarter of 2008 and 2.5 per cent in the first quarter of 2009.
However, the economy grew an albeit meagre 2.8 per cent in the second quarter of 2013 from the same period in 2012.
All sectors of the economy except tourism grew at a slower pace. The agricultural sector expanded just 0.1 per cent, with a 7.9 decline in fisheries due to a shrimp disease. The manufacturing sector slowed by 1 per cent as external demand has not recovered and domestic demand has decelerated. For domestic expenditure, household consumption and investment grew at a slower 2.4 per cent and 4.5 per cent respectively.
The country’s National Economic and Social Development Board on August 19 cut its forecast for full-year GDP growth to a range of 3.8-4.3 per cent, from 4.2-5.2 per cent made in May. The body also lowered its export growth estimate to 5 per cent from 7.6 per cent.
All this sent share prices at the Stock Exchange of Thailand tumbling 3.27 per cent and dragged the SET index below 1,400 points.
The baht fell to a new one-year low at 31.64 to the dollar and 42.09 to the euro as of August 20 noon. Inflation slowed for a seventh straight month in July to 2 per cent on the back declining consumer purchasing power.
