UPDATE 1-Thai Dec factory output up 23.4 pct y/y; less than expected
* Output +23.4 pct y/y vs +32.2 pct in Reuters poll
* Dec output down 6.31 pct m/m
* Rise reflects low base from floods in late 2011
* Ministry sees output up 3.5-4.5 pct in 2013
* Most economists see no monetary policy change in Feb
By Boontiwa Wichakul
BANGKOK, Jan 28 (Reuters) - Thai factory output in December fell in December from the previous month and grew less than forecast from a year earlier, suggesting global problems continue to hurt exports and drag down production.
On a year-on-year basis, industrial output rose 23.4 percent in December from the low base a year earlier when severe flooding devastated industry. The increase was below the 32 percent forecast by economists in a Reuters poll.
On a monthly basis, unadjusted output fell 6.31 percent in December after a revised 8.25 percent expansion in November.
For all of 2012, output rose only 2.51 percent. The Industry Ministry has said the flood-hit, important electronics sector has been slow to recover. Due to the floods, output fell 9.3 percent in 2011.
The Industry Ministry has forecast total output will rise 3.5-4.5 percent in 2013.
Pimonwan Mahujchariyawong, an economist at Kasikorn Research Center, said the December figures showed that industrial recovery was slower than expected.
"We expect that at the start of 2013 industrial output will revive but overall manufacturing production index (MPI) figures this year will not be particularly impressive," she said.
"For manufacturing, the recovery of the global economy should be a plus and the baht's strength could impact exports in a negative way, including MPI," Pimonwan added.
Overall capacity utilisation was about 69 percent in November, not much improvement from 58.7 percent for all of 2011. The textile industry's rate was only 43 percent in that month but the auto sector's was 117.8 percent, fuelled by a government subsidy for first-time car buyers. The subsidy ended on Dec. 31.
Thailand is a regional hub and export base for top global carmakers and is the world's number two producer of hard disk drives.
Factory output tracks exports, which fell in December from November and rose a less-than-expected 13.5 percent from a year before as overseas demand remained soft, customs data showed last week.
CONCERN ON BAHT STRENGTH
Industrial goods account for about 65 percent of total shipments, which are each year equal more than 60 percent of the economy.
At present, Thailand's strong baht has added to concern over the outlook for exports, prompting authorities to discuss how to cope with the currency's strength. This year, the baht has strengthened about 2.2 percent against the dollar.
Earlier this month, the Bank of Thailand (BOT) forecast exports to rise 9 percent in 2013 and said that shipments will rebound in the second half.
The central bank has raised its 2013 economic growth projection to 4.9 percent from 4.7 percent, citing stronger-than-expected private investment.
On Jan. 9, the BOT's policy monetary committee left the benchmark interest rate unchanged at 2.75 percent for a second straight meeting, betting on better economic trends. .
Most economists expect the rate to be left on hold in coming months as domestic demand remains strong. The next policy review is on Feb. 20. (Additional reporting by Amy Sawitta Lefevre; Writing by Orathai Sriring; Editing by Richard Borsuk)
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