BANGKOK: Thai factory output in August fell a bigger-than expected 11.32 percent from a year earlier, due to faltering global demand, which economists said raises the chances the central bank could cut interest rates to help business.
The dismal output data comes just as export-driven Thailand has restored its industrial capacity following devastating floods in late 2011.
The August fall was led by weakness in hard disk drives, electronics, petroleum, frozen foods and textile, the Industry Ministry said in statement, which gave no further detail.
"I think this data shows that the chance of a Bank of Thailand rate cut rises significantly." Nuchjarin Panarode, an economist at Capital Nomura Securities.
"Manufacturing sector for export doing much worse than expected, linked to August export figures. We should be seeing Q4 growth for this year due to last year's low base effect but growth might not be as expected due to the impact of the global econ crisis on exports," she said.
The 11.32 percent on-year fall in August output compared with a 7.0 percent decline forecast in a Reuters poll, and with a revised 5.49 percent contraction in July. In June, output fell 9.6 percent from a year earlier.
On a monthly basis, factory production was down 2.57 percent in August after a revised 2.02 percent decline in July and 3.5 percent drop in June, the Industry Ministry said on Friday.
The BOT has left its benchmark interest rate steady at 3.0 percent since two cuts in November and January to help firms recover from the worst flooding in half a century.
The floods forced seven big industrial estates to close in October last year. Cars and electronics firms -- many of them big exporters -- were the worst hit. Thailand is a regional hub and export base for the world's car makers and producers of hard disk drives.
Most affected firms have resumed production, with the auto sector now fully operational, although some are still closed, the Industry Ministry said.
Thailand and other export-dependent countries in Asia are facing steady falls in shipments as global demand falters.
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