Thailand’s economy posted double-digit growth in the first quarter of 2012, rebounding sharply from the fallout of last year’s devastating floods, official data showed Monday.
Gross domestic product (GDP) grew 11 percent in January-March from the previous quarter, when the economy had contracted 10.8 percent, according to the National Economic and Social Development Board (NESDB).
GDP rose 0.3 percent compared with the same period in 2011.
The months-long floods last year killed hundreds of people and caused widespread damage to Thailand’s industrial heartland north of Bangkok.
Investment by companies to get their plants back up and running is now helping to revive the economy, while the agriculture sector posted solid growth and consumer demand also rebounded in the first quarter, the figures showed.
At their height the floods affected 65 of the country’s 77 provinces, deluged hundreds of thousands of homes and forced the closure of large industrial parks, disrupting global supply chains.
But with plants starting to reopen, the NESDB economic planning agency forecast economic growth of 5.5-6.5 percent for the whole of 2012.
The manufacturing sector has not yet returned to full strength, said Thanawat Polwichai, director of the centre for Economic and Business Forecasting at the University of the Thai Chamber of Commerce.
“Industry will recover further in the second quarter,” he predicted.
But Thailand’s economy is heavily reliant on exports so the eurozone debt crisis and slowing Chinese growth is expected to take its toll.
“The major risk for our recovery is the sluggish global economy, which may cause our exports to decline, while the manufacturing sector may face higher costs from increased wages and material prices,” Thanawat said.
On May 11 the Bank of Thailand upgraded its forecast for the kingdom’s economic growth this year to 6.0 percent, from a previous projection of 5.7 percent.
Earlier this month the central bank held its key interest rate steady at 3.0 percent, where it has been since January, to spur the economic recovery.
Analysts expect the Bank to maintain official borrowing costs at current levels in the coming months to give the economy time to regain its strength.
“The interest rate will be held at 3.0 percent for the rest of the year because there are downside risks to growth such as the EU debt crisis,” said Usara Wilaipich, senior economist at Standard Chartered Bank.
“Falling oil prices will also ease inflationary pressures,” she added.