(Adds details, economist's comment)
* March output -3.17 pct y/y vs f'cast -0.5 pct
* Output falls for 7th month after floods in late 2011
* Ministry sees output up 6-7 pct in 2012
* Economists expect no change in policy rate next week
By Orathai Sriring and Boontiwa Wichakul
BANGKOK, April 27 Thai factory output fell a
bigger-than-expected 3.17 percent in March from the year-earlier
month as the impact of last year's floods on industry persisted,
but the government still predicts output will rise 6-7 percent
The Industry Ministry expects major flood-hit industries to
be back to normal around the middle of the year, and economists
said the central bank will likely keep interest rates low to
support the recovery.
"We think our major industries will recover 100 percent
around June as more than half are fully back now,"
Verasak Supprasert, a specialist at the ministry's Office of
Industrial Economics, told a news conference.
Output dropped 3.17 percent in March after a revised 3.16
percent fall year on year in February. A Reuters poll had
forecast a fall of 0.5 percent in March. Compared with February,
output rose 11.5 percent..
Output plummeted 47 percent in November from the
year-earlier month as the worst floods in decades hit auto and
electronics firms. It fell 9.3 percent for the whole of last
Thailand is a regional hub for the world's top car makers,
and the world's number two producer of hard disk drives.
Verasak did not say when annual output would return to
growth after shrinking 7.1 percent in the first quarter.
NO SMOOTH SAILING
Output is expected to remain weak in coming months, weighing
on exports, as industrial goods account for about 65 percent of
Customs data showed exports unexpectedly fell 6.5 percent in
March from a year earlier, while imports surged 25.6 percent,
producing a record trade deficit of $4.6 billion, due to the
floods and faltering global demand..
"Taken together, this is a clear indication that the road to
normalcy is not going to be as smooth-sailing as some had
earlier expected," said Gundy Cahyadi, an economist at OCBC Bank
The Bank of Thailand has said production may only get back
to normal in the third quarter of this year. It predicts exports
growth of 7.8 percent, but the Commerce Ministry forecast a 15
The central bank left its benchmark interest rate THCBIR=ECI
unchanged at 3.0 percent at its last meeting on March 21 after
cuts at the previous two meetings..
Economists expect no change in the policy rate at the BOT's
review on May 2, and perhaps all year.
The economy grew just 0.1 percent in 2011 due to the floods,
but the central bank expects it to expand 5.7 percent this year
due to spending and reconstruction.
The Finance Ministry estimated economic growth of 2 percent
in the first quarter year-on-year.
Porametee Vimolsrir, deputy secretary-general of the
National Economic and Social Development Board, told Reuters on
April 11 the economy probably saw double-digit growth in the
first quarter from the previous three months, when it suffered a
contraction of 10.7 percent..
The board, which complies GDP data in Thailand, forecast
economic growth of 5.5-6.5 percent for 2012. It is due to
release first-quarter GDP data and its new forecasts on May 21.
(Editing by Nick Macfie)